NHS In £345m ‘Asset-Stripping’ Sale

The government has been accused of orchestrating a £345m sell-off of former hospitals in one year in an attempt to balance the NHS budget. The value of the sales is 14 times the previous year’s total. The Department of Health sold 89 properties to developers between March 2005 and 2006.

{mosimage}Of these, 78 went to English Partnerships, a regeneration agency set up by Deputy Prime Minister John Prescott to build affordable housing on brownfield sites. Many sales were contested because local residents wanted buildings to be retained by the NHS or land used as green belt. One of the largest sites sold last year was High Royds in Menston, near Leeds, one of the last psychiatric hospitals of its kind, which closed in February 2003.

The 200-acre site became redundant when nine modern mental health facilities were built in the area. It was sold to the Raven Group for £27.2m and, despite protests, there was no public inquiry. Another large hospital site, St Margaret’s in Walsall, West Midlands, went for £13.25m to Bovis Homes, despite a four-year campaign to keep the land as green belt. Some sites have retained their value to the NHS, such as social clubs taken over by a charitable trust or St Oswald’s Hospice in Newcastle upon Tyne, which has remained a hospice.

The figures were given in a written answer to the shadow Paymaster-General, Mark Francois. ‘Everyone is well aware that there is a serious financial crisis in the NHS,’ he said. ‘It does seem that the government has been accelerating the NHS land sales in an attempt to try to plug the gap.’

The value of property sales rose from £4.9m in 2004-05 to £345m in 2005-06, which included the £280m deal with English Partnerships. The DoH said all proceeds went back to the department, and into its capital fund for building new facilities or buying equipment. A spokeswoman said: ‘The proceeds from the sale of these assets are recorded in the accounts of the Department of Health. They are nothing to do with deficits for individual NHS bodies or the NHS as a whole, and have no impact on them whatsoever.’

Prescott and John Reid, then Health Secretary, agreed the English Partnerships deal in 2004, in which dozens of surplus NHS sites were sold. The aim was to create 15,000 new homes – including at least 5,000 affordable properties.

In 2002, the Commons Public Accounts Committee said that, with the NHS changing rapidly and more demand to house nurses, health bosses should be wary of disposing of sites. Increasing land values have made it asset sales attractive to finance directors.

Geoff Martin, of pressure group London Health Emergency, said: ‘It is such a short-term measure to flog off these properties because finances are tough now. It’s asset-stripping the NHS land bank.’