NHS Property Services lacks necessary powers

The National Audit Office warns that NHS Property Services Limited lacks the powers it needs to make its tenants sign lease agreements and pay their rent.

The issue, which has contributed to increasing levels of outstanding debt, is growing as NHS Property Services Limited does not have the same powers as a commercial landlord for NHS tenants, limiting its ability to take action when bills are not paid. Action against non-NHS tenants, including GPs, must be approved by the Department on a case-by-case basis.

The service was established in December 2011 to manage, maintain and improve NHS properties in England and facilities previously owned by strategic health authorities and primary care trusts. It operates 2,900 properties with an estimated value of £3.8 billion, and has approximately 6,950 tenants.

Since 2014 the percentage of tenants without leases has increased from nearly two-thirds to 70 per cent. The service has improved the quality of data it holds and introduced a new billing system in 2017, but many bills are still disputed, particularly by tenants without rental agreements.

Furthermore, outstanding debt has almost tripled, to £576 million, and tenants are taking much longer to pay their debts. In 2018-19, the Service only recovered 58.4p for every £1 it billed. Between 2014-15 and 2018-19, NHS Property Services Limited wrote off £110 million of debt and a new arbitration process for resolving disputed bills is not working effectively.

Gareth Davies, the head of the NAO, said: “The service has slowly improved the way it manages its NHS properties. However, more than eight years after being created it still lacks the powers it needs to run its affairs effectively, and the accuracy of bills is still disputed.

“In our view, too many NHS organisations and GPs seem to regard paying for their premises as optional, with almost £700 million either written off or still unpaid. The system for charging for NHS property is not working effectively and the Department urgently needs to address the fundamental causes of this unsatisfactory situation.”

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