NHS Estates Report: Making Estates Work

There are trusts developing innovative schemes, such as joint ventures and Limited Liability Partnerships, to raise funds for capital projects.

For all the apparently bad news, there is evidence of innovation. Sir Robert points to his old workplace: "The nearly £300 million phase 4 development currently under construction at UCLH - cancer, day surgery and proton beam therapy - is funded partially by the Treasury, trust cash, the UCLH Charity and a long-term lease for two private floors to the private sector."

University Hospital Southampton NHS Foundation Trust has a three-year capital plan which will draw on some £75 million from surpluses, plus £50 million from sources including Department of Health projects, the National Institute for Health Research, Southampton University, the hospital's own charity and the Murray Parish Trust which raises money for children's emergency services across the south of England.

Bagnall is proud of his work to date. He says the trust has built a new radiotherapy linear accelerator bunker, set in motion a £15 million replacement programme for ageing linear accelerators, and built a new cancer immunotherapy research centre which is playing a role in the recent breakthrough in the treatment of melanoma. The trust has almost finished building a new urology day unit and a general intensive care unit with 32 beds - up from the current 25 beds.

In 2013 the trust formed a strategic estates partnership joint venture with Prime PLC which has resulted in a new front entrance for the hospital. The trust receives rental income from the retail units, but much of the income is used to offset the building costs.

"The old entrance from the '80s looked very tired and not fit for purpose," says Bagnall. "Now there is plenty of space, plenty of facilities, a Marks & Spencer, WH Smith, Costa, Subway etc. It's a way of realising a commercial interest, but it's also important for patients and visitors: they can sit down, relax and not worry about where they can get a sandwich. It's also enabled us to build a new 800-space multi-storey car park, so there is now adequate space for patients, visitors and staff."

REDUCING FINANCIAL RISK

Spotswood is another advocate of joint ventures, where the NHS does not carry significant financial risk: "Five years ago my (then) organisation had some surplus land and we were approached by AHH to form a joint venture vehicle, in which AHH would guarantee the trust a return equivalent to the open...