New report reveals huge variation in estates utilisation and performance across NHS trusts

21-Jun-2011

SOME NHS trusts in England are leaving around half of their estate unused, according to a new report which claims more than £1billion a year could be saved if improvements were made.

There may be many months spent fine tuning the current health bill, but this should not stop legitimate and necessary changes being made to reduce expenditure on the NHS estate and to improve service delivery

Built asset consultancy, EC Harris, has this week published its second annual NHS Service and Estate Efficiency Report, which finds that by carrying out a series of efficiency measures across the NHS, there is an opportunity to secure revenue savings in excess of £1billion a year and a further £1billion in capital from sales.

Compared to the first report in 2008/09, the NHS is using its estate more efficiently, with the amount of underused or empty space down by nearly a third from more than three million sq m to 2.1 million sq m in 2009/10. However, this unused space is still equivalent to the entire footprint of both Sainsbury\'s and Waitrose stores combined.

Conor Ellis of EC Harris said: "Like any system undergoing so much change, this is a testing time for the NHS. There may be many months spent fine tuning the current health bill, not least due to the intensifying opposition, but this should not stop legitimate and necessary changes being made to reduce expenditure on the NHS estate and to improve service delivery."

the vacant or underused space could provide a likely capital receipt of £1.08billion based upon achieving 50% of the total available area. At worst, even if 50% of the space was just demolished, it would reduce hard and soft FM and energy changes by £248m a year

A key finding in the report is the gap between the worst and best-performing NHS trusts in terms of estate utilisation, with a 5% different in many cases. The report states: "Overall the total space of the NHS is 28,379 million sq m, of which there is still some 2,107 million sq m left unoccupied or underused - 7.4% of the total floorspace. The good news is this has shrunk from more than three million sq m in 2008/09.

"However, the vacant or underused space could provide a likely capital receipt of £1.08billion based upon achieving 50% of the total available area. At worst, even if 50% of the space was just demolished, it would reduce hard and soft FM and energy charges by £248m a year."

On the gap between performance, the report adds: "The figures demonstrate that the NHS is using its estate more efficiently than the previous year and this is to be welcomed. However, there is still significant opportunity for further improvement. While total estate occupancy costs have improved in most cases, of concern is the variation in performance. The gap between the best and the mean is still too great to explain by simple organisational estate or service history. Overall, EC Harris believes there is opportunity to secure revenue savings in excess of £1billion annually."

Ellis said that, straight away, trusts could take steps towards improvements by benchmarking themselves against the best performers and using them as a target to aim for in order to boost performance.

He added: "For example, for total occupancy costs, that is hard and soft facilities management and energy costs, the best-performing five organisations outperform the NHS mean by 24% in acute, 41% in mental health and 54% in primary care trusts, so many trusts could effectively make more than £1m savings by achieving average performance."

Sign up for your free email newsletter

The range of opportunities that exist to make radical savings includes a series of measures looking at everything from procurement to facilities management and the sale or re-use of land.

Companies