Doing more with less (or the same) revenue

Community Ventures’ Chief Executive Emma Bolton and Associate Director Louise English look at how the NHS estate is facing its funding challenges, and how to maximise your assets and make informed decisions.

The start of the pandemic in 2020 meant a short-term end to the monitoring of Trust (and system) cost improvement programmes (CIPs) as the national issues necessitated focus on delivery of safe healthcare, and then recovery from the pandemic restrictions – the Chancellor’s mantra of ‘we will do what it takes’, echoing into public services. The nation’s focus on the NHS meant a short-term reprieve from the year-on-year real terms reduction in NHS funding which created a £322bn underspend between 2009/10-2021/22. During the pandemic, emergency funds were provided to the Department of Health and Social Care (DHSC) to support the Covid-19 response, with £46bn of ringfenced funding provided in 2020/21, and £37bn provided in 2021/22.

The 2023 Spring Budget provided no new funding for DHSC for the remainder of the Spending Review period (ending 2024/25), with spending expected to be stable for the next two years. The drive for efficiency is therefore back on the table, with Trusts now focusing once again on CIPs. However, it is now doing so in the face of other challenges, including huge elective waiting lists, NHS reorganisation, and ongoing industrial action. The drive for productivity at the same time as reducing cost will continue to be very high priority. Services are no longer experiencing seasonal surges, rather demand remains at a constant high level. In November 2023 the NHS delivered the highest monthly activity on record both in terms of treatment and diagnostics, however waiting lists are still at an all-time high and ‘the puzzle of why the NHS is delivering little more activity despite receiving significantly more money and employing many more staff is a critical policy question.’ (Nuffield Trust 2024).

NHS organisations have been tasked with cost improvement targets for the best part of a decade. Against the backdrop of increased demand, it calls into question the principle of the continued pressure to identify further efficiencies without risking service delivery. It creates a risk that sweeping cuts will be made in order to balance the books.

Many of the ‘quick wins’ have already been made in past years. What remains are more challenging and perhaps unpalatable opportunities affecting service delivery and, ultimately, the patient. There will be a focus on estates, as key contributor to CIPs, as a more palatable alternative to cutting clinical services or staff. Indeed, it might be a sensible alternative, because we know that much of the NHS estate is in poor condition, expensive to run and difficult to refurbish to meet the needs of modern healthcare. However, the absence of a clear and up-to-date clinical strategy, that informs the needs from the estate, creates a risk that short-term decisions will be made without an understanding of the long-term implications. Furthermore, the drive to do more with less, creates challenges in building resilience into the estate – not just for future health pandemics, but equally important for business continuity plans.

Of course, seeing estate as a quick fix often belies the illiquidity of estates and that its disposal is a tricky process. Nothing happens quickly in estate matters, and any significant changes to service delivery or disposal of NHS estate also needs to be subject to public engagement and consultation, and impact assessments. NHS managers should bear this in mind, and our advice is that you should estimate how long a sale might take, and then add another six months on as a contingency. Delays can be mitigated by doing due diligence up front, which means engaging surveys and solicitors to make sure that you understand your property titles, planning status and marketability. Storing this information on a property management system can enable strategic decisions to be made about which estate might yield most benefits should it be declared surplus, and this can help discussions about whether buildings are core, flex or tail. It should be noted that wider political and economic uncertainty, not least the fact that the UK is now in recession, may affect the property market and hinder disposal attempts too.

This is where the infrastructure strategy process should come into its own. Hopefully, the process will identify estate which is ‘core’, and efforts can be made to ensure that this estate is utilised as fully as possible. The strategies will also consider the role that digital advancements have to offer into our clinical services, and where this could have estates impacts.

Working at system level should ensure that opportunities to collaborate are maximised (hopefully without the usually ensuing discussions about how funds will flow, because that often causes delays) and decisions can be made for the common good.

It is envisaged that the completed infrastructure strategies will provide systems with a clearer understanding of the estate, and a prioritised list of potential projects. It is important that the revenue impact of these projects is properly understood in order to plan for the future lifecycle of the system portfolio.

How we can help you do more with less

At Community Ventures and Shared Agenda, we are currently helping NHS organisations work with restricted revenue in the following ways:

  • Estates Strategy Development. As well as assisting the national infrastructure strategy programme, we are also advising NHS organisations on development of their internal estate strategies and supporting implementation plans. An estates strategy will help you understand your current portfolio and will match this to your service ambitions and organisational priorities.
  • Bespoke Estates Reviews. We have undertaken bespoke pieces of work as a stock-taking exercise or to address particular estates challenges for NHS organisations.
  • Business Cases. We have a team of 30+ trained and accredited business case professionals who will work in partnership with you to consider your property investment proposals, including the capital and revenue impact of such plans. We work creatively with partners to find solutions even when the financial envelope is challenging, and investment into new, fit-for-purpose premises leads to estates savings.
  • Utilisation Studies. It is important that NHS organisations do not rely solely on booking systems to understand how well utilised their space is. We can undertake comprehensive utilisation studies using a variety of means, which will provide tangible data on estate occupancy. Using this information will allow NHS organisations to:
    • Separate the allocation of space from the utilisation of that space. Optimal utilisation should be at roughly 70-80% of the core operating hours
    • Create and adopt agile working policies across regions and/or footprints. This will create consistency and will underpin how organisations can seek to maximise their corporate and back-office estate
    • Seek to eliminate the barriers to sharing space, such as ICT, confidentiality issues, and income generation.

As part of a good strategy, this can allow organisations to release estate which is not well used or well performing in order to maximise more productive estate.

  • Property Performance Reviews. Understanding your portfolio is essential before strategic decisions are made. We manage property performance on behalf of a number of NHS Trusts, including overseeing NHS Estates Return Information Collections (ERIC), undertaking property benchmarking, identifying outliers, testing scenarios and providing advisory reports to boards, which help make future property decisions
  • Property Due Diligence. We perform estates reviews, considering estate which may be potentially surplus and identifying what constraints might affect disposal. We utilise our network of advisors to ensure that you receive accurate and up-to-date market information about potential sale values, suggested disposal routes and considerations ahead of disposals (such as legal restrictions and planning matters)
  • Property Disposal. We are vastly experienced in the disposal of NHS property and can assist in managing the process from initial consultation stage, through to sale contract completion

Want to find out how we can help you hit your targets, despite budget restrictions? Get in touch.