Improved estate procurement could save NHS £1 billion

24 February 2012

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24 February 2012 | Angeline Albert

The NHS could save £1 billion through improved procurement for estates and efficiencies gained through land disposal, according to research.

According to consultancy EC Harris the health service is missing out on £2 billion savings by wasting the space available in its estate. In addition to the £1 billion saved through better procurement, a further £1 billion could be saved by selling off 50 per cent of this unused space. The report added that neighbouring NHS trusts should work together to maximise economies of scale and make better use of its estate.

In its third annual report into the efficiency of the NHS estate Shaped for the future - Reforming the NHS Estate, EC Harris said the NHS had cut the amount of space underused by 210,000 metres squared in 2010-11 compared to 2009-10, the equivalent of 264 football pitches. But 1.9 million metres squared remains poorly utilised.

“The majority of remaining unused space is owned by foundation trusts and is therefore not accessible to the Treasury to dispose of or seek savings through leveraging procurement scale,” said Conor Ellis, the report’s author and a partner at EC Harris. “This means that local collaboration is more important than ever.”

The NHS has to save £20 billion by 2014-15. A spokeswoman for the Department of Health (DH) said the it had identified “the potential for £1.2 billion savings as part of the [Quality, Innovation, Productivity and Prevention] initiative and is launching a procurement strategy in April to help the NHS deliver this target.”

She added: “The NHS decides locally on the estate they need to deliver high quality services. This includes deciding which estate, not needed by the NHS, can be used more efficiently.”

DH is establishing the company NHS Property Services, which will manage properties owned by primary care trusts, when they are abolished at the end of March. The company (owned by the department) will release savings from properties that are surplus to requirements but NHS foundation trusts will remain responsible for their own estate.

 

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