Part 1 – The Transferees

Under the National Health Service Act 2006, where a Primary Care Trust is dissolved the Act provides that the property rights and liabilities may be transferred to an NHS Body, the Secretary of State or the Welsh Ministers. An NHS body is defined for the purposes of the Act as:

  1. a strategic health authority
  2. a primary care trust
  3. an NHS trust
  4. a special health authority
  5. an NHS foundation trust
  6. a local health board

Once the Health and Social Care Bill is passed, primary care trusts and strategic health authorities will be removed from this definition and the National Commissioning Board and the GP consortia will be added in. The inclusion of GP consortia ends the earlier conjecture as to whether or not they are going to be regarded as NHS bodies for the purposes of the legislation and so we know it is contemplated that they will be potential transferees of PCT estate.

The big question now therefore is whether the mechanics will be pressed into service. Circumstances where the transfer to GP consortia would be logical are:

  1. where property relates to services where they are the commissioner (in line with the original TCS guidance). However, this would be subject to the recent guidance giving aspirant Community Foundation Trusts the opportunity to acquire estate relating to services they are providing; and
  2. where there are administrative offices which house existing teams (eg. commissioning) which will be transferred to the GP Consortium as part of the transition. The provisions of the Bill go further as not only does it propose amendment to the definition of NHS Bodies, but goes on to provide that the Secretary of State can make property transfer orders to a number of other specified parties (as well as himself) namely:
    • The National Health Service Commissioning Board
    • A commissioning consortium
    • A local authority
    • The Care Quality Commission
    • Monitor
    • A Special Health Authority
    • Any public authority which provides services as part of the health service in England
    • Any other person who provides services as part of the health service in England and consents to the transfer
    • A qualifying company
    • Any person with whom the Secretary of State has made, or has decided to make, an agreement under section 12ZA(1) of the Mental Health Act 1983 (schedule 21)

Note that a property transfer scheme may make provision for the shared ownership or use of property.

As well as including all the bodies in the new NHS body definition (with the exception of the Local Health Board) they have broadened the potential recipients significantly with the inclusion of the generic additions to the list. The widest of these is the “any person who provides services” category.

Note that in theory (and subject to other considerations such as State Aid), this will allow for transfers to take place to individual GP practices and Social Enterprises set up from provider arms.

Notable exceptions from this list are Community Health Partnerships and LiftCos as they do not constitute qualifying companies, nor do they fit comfortably with the more generic categories as they do not provide clinical services as envisaged by the 2006 Act. If it is intended that any part of PCT property should be transferred to these, then the transfers will need to take place in the normal fashion (by conveyance or assignment) and before the PCTs are dissolved.

Part 2 – The issues

Whether this takes place by transfer order or by the parties entering into the various documents required, there are a number of factors that PCTs need to take into account at this stage.

  1. After the last reorganisation in 2006, in most cases there was no requirement for a definitive list of the properties that were to be transferred to the new PCTs because all of the assets and liabilities transferred to the new PCT. This meant that there were frequently situations where the new PCTs did not have an overall picture of the full extent of their estate. This was a particular complication where the PCTs were taking on undocumented occupational rights. With the data compiled in accordance with the Commissioners' Investment & Asset Management Strategy (CIAMs) survey PCTs should be in a better position to be clearer about what they have and what goes where. Unless the intention is to transfer all properties, a complete list of the properties transferring (or an exceptions list) should be compiled and agreed as soon as possible.  

There will be freehold interest; leases/under leases and licences from third parties (eg. FTs, third party developer companies and LiftCos) but PCTs may find the biggest issue is the extent of continuing undocumented occupational interests. These should all be noted on the transfer schedule.  

Ideally, PCTs should plan to sort and document all of its undocumented occupational interests appropriately before transfer but the cost involved may be prohibitive.  

  1. Where the provider is taking the property but the Commissioner will continue to occupy or it has a contestability plan which it has to implement, the Commissioner will have to consider the controls it will require over the estate. Those controls may extend to nomination rights. In other cases, there may be occasions where the commissioner needs to take a lease or licence back from the provider to regulate the commissioner’s continued occupation of the space. Consider whether a lease arrangement or a licence is more appropriate. The licence has the advantage of being quicker and easier to draft, and can frequently be used where the arrangements are short term between NHS bodies or where they allow for sharing of occupation or relocation and in circumstances where there is little risk that security of tenure could arise. Leases can take longer to agree and are more rigid structures but provide certainty and avoid all risk of occupiers getting unplanned security of tenure where exclusive possession is being granted.
  2. If transfer is by transfer order that takes precedence over the terms in any lease and negates the need to get reversioner's consent etc so can save time in that regard. This will act as an incentive to ensure that the property transfers take place at the time of the initial transfer order.
  3. Many PCTs also hold proprietary interests in the form of legal charges granted after s256 Grants have been made. Many of these grants were made in favour of local authorities and housing associations. Where this is the case the local authority seems to be the obvious recipient of the benefit of the charge (ie. thus prompting a surrender of that interest). There are situations, however, where the grant was made direct to a third party (e.g. a housing association) and the PCT will need to consider which party is best placed for the charge to be transferred to in those circumstances.