In June 2011, the Prime Minister outlined his commitment to release enough surplus public land to build 100,000 new homes across the country by March 2015.

In March 2013, the Department of Health was promoting the opportunity as a win-win situation for the NHS, stating:

‘income generated from the sale of surplus land will be used by the NHS to deliver new and improved hospitals as well as refurbishment and improvement of existing facilities. Much of the surplus estate will be suitable for redevelopment into housing, including that for affordable housing for local people.’

Initiatives to assist in this accelerated disposal program included:

  • £290 million of funding made available to support NHS trusts in bringing sites to the market through the Homes and Community Agency (HCA).
  • Access to the HCA’s ‘Delivery Partner Panel’ (a national resource to speed up the delivery of housing on public sector land).
  • The ‘Electronic Property Information Mapping Service’ (e-PIMS) to keep potential purchasers aware of surplus land available
  • Access to ‘Advisory Team for Large Applications’ (ATLAS) to provide support and to identify issues associated with larger sites, such as planning considerations and marketing.

It was announced in March of this year that the Government had managed to exceed its target by releasing enough land for 103,000 new homes. The NHS had certainly played its part in the successful outcome, with NHS and Department of Health released land accounting for over 10% of the total (enough for 13,039 new homes).

However, the job is far from over; the Government is calling for continued sales of redundant sites and buildings and announced in March that it planned to release further land with capacity for between 150,000 and 200,000 new homes between 2015 and 2020.

Since April 2015, the HCA will now take an even more active role and will be the Government’s land disposal agency. HCA will look to co-ordinate site disposals to maximise value for money and simplify points of contact for prospective developers. HCA is running a number of initiatives designed to further stimulate new home building; particularly affordable housing, such as the creation of a £2.9 billion fund available to new home builders across the country to use for affordable housing developments. This means there will be many more opportunities for housing builders and therefore further opportunities for disposal of surplus land.

Further initiatives introduced to encourage disposal include:

  • The ‘Right to Contest’, which enables local authorities, businesses or members of the public to challenge central Government about a site that is potentially surplus or redundant and could be put to better economic use or right to challenge local authorities or other public bodies if the site is empty or under-used and there are no plans to bring it back into use.
  • A ‘Community Right to Reclaim Land’, which allows communities to ask that under-used or unused land is sold so that it can be brought back into use.

Although these rights do not apply directly to the NHS currently, they give a clear indication of the direction the Government is taking and the continued and increasing pressure it is placing on public bodies to dispose of surplus land.

The challenge going forward is not just to dispose of surplus land, but for the NHS to find more innovative methods of dealing with it. Many public bodies have entered into partnerships with housing associations and registered housing providers to develop new models of disposal where the public body maintains an interest in the land. This has the advantages of allowing the public body to have a greater say in the use of the land and generates a long term ongoing income stream rather than a oneoff capital gain.

Of particular interest to the NHS is the possibility of partnership developments delivering strategic benefits. For example, a development could be used as part of a care pathway for the elderly, people with mental health issues or complex health needs. The developments could include supported living provisions, saving the use of other NHS facilities. Living in modern accommodation by way of affordable housing also offers health and wellbeing benefits to occupiers and potentially reduces demands on other NHS services.

Although the NHS has played a valuable part in the success of the scheme over the last five years, it still has a huge part to play in the ongoing programme and, as the demand for services continues to be stretched, there are a number of opportunities available for creative use of surplus land.

We regularly advise our NHS clients on the issues around surplus land, including provision of a strategic estates review, whereby potential surplus land may be identified. If you would like to discuss this or any other property related matters, please contact our specialist NHS property team.