The Naylor Review – private investment funding proposals
In March this year, the long awaited NHS Property and Estates review by Sir Robert Naylor was published. It estimated a capital investment requirement of £10bn to deliver service transformation across the 44 NHS sustainability and transformation partnerships (STPs). The report went on to propose that this sum should be funded through three sources:
- Site disposals
- Private capital for primary care developments
- HM Treasury
At Capsticks we’ve already seen a marked increase in the number of site disposals by our NHS clients following on from Naylor. However capital receipts from land sales alone are estimated to generate around £2.7bn, and so this is unlikely to comprise the whole solution to the £10bn needed – nor was it intended to do so. The land sales proposals also haven’t been without political controversy in some quarters regarding a perceived “firesale” to help shore up NHS finances.
Three private property companies team up on capital investment for primary care
As such, the proposal this week from three private property companies (Primary Health Properties, Octopus Healthcare and Assura) to offer £3.3bn as capital funding which could help to develop up to 750 primary care centres was welcomed by Sir Robert and is now being considered further by ministers.
The private property companies’ proposals appear to be based on an updated version of the traditional 3PD (third party development) model which was widely utilised within primary care prior to NHS LIFT. The three companies would develop and retain ownership of the new facilities, with GPs and other providers leasing facilities for 15-25 years on rental levels set by the District Valuer.
Only time will tell
Given the current state of much of the primary care estate and the recent BMA survey results which found that 52% of GPs said their premises had not received any investment in the last decade, these proposals could present a welcome opportunity to kick start redevelopment and refurbishment within the primary care estate. Much will depend on the “small print” following scrutiny by ministers and the general affordability of rental payments for a return on this investment, in order to avoid the perception that this is just a return to PFI by another name. However, given the overwhelming case as presented in Naylor for an urgent funding solution, query whether there are many other realistic options on the table to generate this level of much needed funding at the present time.
For further information and advice please contact Mark Paget Skelin