We are targeting completion of up to 30 additional projects and transactions by the end of this financial year, which will reduce the NHS office estate by a further 25,000 square metres saving an additional £22 million.
This case study showcases seven of these projects.
Our office specialists carried out strategic reviews, working with organisations across the NHS Estate, including NHS England, and the respective CSUs and ICBs. The properties were significantly underutilised due to remote and hybrid working practices, and our team sourced alternative, better-suited spaces when opportunities became evident at lease expiries and break options.
Background
The NHS estate goes beyond clinical space, with offices accounting for a significant portion of space and cost. Within NHS Property Services’ portfolio alone, offices account for around 400 holdings, spanning approximately 400,000 square metres and serving multiple NHS bodies.
The COVID-19 pandemic has reshaped office space requirements by accelerating trends such as remote and hybrid working, resulting in underutilisation. As such, many organisations are looking to re-evaluate / downsize their office space or invest in new buildings that can better adapt to a more agile working environment.
Our office specialists, who form part of the NHSPS Estate Strategy team, are well placed to review opportunities both within our own portfolio and across the wider NHS and DHSC estate. Their clear goal is to help deliver fit-for-purpose, workplace environments that enable smarter working, drive estate rationalisation and unlock cost savings. This includes providing expert, end-to-end, workplace strategy/solutions, and transaction management services.
Key NHSPS value-add areas
- Understanding occupier needs: Our office team of property experts assessed how offices and workspace were currently being used, and the demand for future space requirements in light of new ways of working. This allowed us to drive efficiencies and system savings for the NHS office estate.
- End-to-end service: From strategic advice through to handling lease negotiations, refurbishing underutilised spaces and supporting relocation, NHSPS provided end-to-end support to ensure a successful and cost-efficient outcome for customers.
- Lease events management and problem solving: The offices team conducted thorough options assessments to make informed decisions related to office lease events such as breaks and expiries, and to make best use of underutilised space, to deliver millions of pounds of savings for the NHS and support smarter working.
- Stakeholder management: NHSPS managed multiple stakeholders involved in rationalising office estates including NHS England, ICBs and Trusts and successfully handled tricky negotiations with landlords.
- Business case support: providing financial analysis and options assessment based on market knowledge and strategic metrics to support the customer business case.
Fosse House Leicester
The challenge
Following NHS England’s review of new ways of working, Fosse House was identified as likely to be significantly underutilised post pandemic. Our office team conducted a strategic review, assessing demand and occupier needs in order to determine a more suitable, alternative space in the area, that would help support smarter working practice.
Solution
Our team
- Identified an available suite at County Hall, Leicester.
- Negotiated terms with Leicestershire County Council, including the required refurbishment works to NHSE’s specification, and minimised any customer capital expenditure.
- Negotiated temporary space at County Hall (at no cost to the NHS) until permanent space was available.
The impact
We helped NHSE optimise and rationalise their footprint. This in turn supported smarter working practices and generated significant savings for the NHS through greater partnering and a better utilised public sector estate.
St John's House Leicester
Challenge
NHSPS held three separate leases on behalf of the stakeholders at St John’s House, all with break options in March 2022. This triggered a strategic review by our office team to explore alternative options. During the stakeholder engagement process, they identified the building was not being utilised efficiently and there was the possibility of rationalisation.
Solution
Our team
- Identified, negotiated, and secured terms for M&L CSU to relocate to County Hall, whilst reducing their footprint.
- Managed the break clause notice for AGEM CSU who relocated within St John’s House with a view to remaining until expiry in March 2024.
- Worked collaboratively with NHSPS Property Management Team and external legal consultants to ensure the break validity; and sought advice from external building surveyors to assess and negotiate favourable dilapidations settlements.
The impact
Both stakeholders optimised their office occupations, generating savings for the NHS. M&L CSU’s relocation to County Hall demonstrated public sector partnership working effectively.
Kirkham House, Worcester
Challenge
NHSPS held separate leases on behalf of Herefordshire & Worcestershire ICB at The Coach House and Acton House, all with lease events in January 2021. Herefordshire & Worcestershire ICB also held another lease directly. A strategic review by our office team identified that all three buildings were not being used efficiently,
two were significantly dated and there was the possibility for rationalisation whilst improving the quality of the workplace for the ICB.
Solution
The team
- Conducted a strategic review - a new, purpose-built headquarters was identified as the preferred option for consolidation, meeting all objectives set out by the ICB.
- Worked collaboratively with NHSPS’s Lease Events team in negotiation of a favourable lease at Kirkham House. This included concessions with the landlord, resulting in an agreement to carry out identified works (at their own expense) before the ICB’s occupation. This proactive approach reduced the risk of unexpected repairs during the lease term, reducing ongoing financial implications for the NHS.
- Provided advice and sought external resources to manage dilapidations and lease exits of the two existing buildings.
Impact
The ICB moved to its modern, renovated HQ in Worcester with a significantly reduced dilapidations liability. By consolidating and rationalising their office spaces, the ICB saved money for the NHS, while providing a modern and efficient workspace for their colleagues.
Milton Park, Abingdon, Oxford
Challenge
Our office team undertook a strategic review of the CSU office accommodation at Milton Park to determine their current utilisation of the building in advance of the lease expiry date (April 2022).
The review established that only 20% of the space was being utilised by CSU employees given a large proportion of the workforce was now
working from home in light on more hybrid ways of working post pandemic
Solution
Our team
- Undertook a market search and options assessment to identify a suitable alternative office base for the CSU.
- Identified Jubilee House in Oxford as the best solution, given the CSU already had an existing legal interest within the property along with other system partners. Their demise was also poorly utilised and located near to Milton Park.
- By relocating to Jubilee House, the CSU were able to relinquish their interest at Milton Park and subsequently make better use of existing space.
Impact
The NHS relinquished their interest in a commercial building and generated £500,000 of system savings over a 5-year period.
Lower Marsh, London
Challenge
In light of more hybrid ways of working post pandemic, there had been a significant reduction in the utilisation of Lower Marsh by NEL CSU and GSTT. Following a strategic review by NHSPS’ office team, which focused on the occupiers ongoing requirements for the building, a decision was made to exercise the break at Lower Marsh.
However, the Vacant Possession (VP) Break conditions proved challenging to meet and required various NHS functions / external contractors to work together to ensure the break was successfully served.
Solution
Our team
- Co-ordinated the project, working with key stakeholders to overcome a challenging break condition which subsequently generated substantial system savings.
- This included initiating sub-lease negotiations with the building occupiers to vary their current sub-lease expiry date. Thereby
enabling essential Vacant Possession (VP) works to be undertaken as a result of an early termination date. - Inspected the property with external contractors to determine the scope of the VP works required and agreed a subsequent timeframe for the works to be completed.
Impact
The onerous VP break conditions were met, and the NHS relinquished their interest in an underutilised office building, generating system savings of around £16 million over a 5-year period.
Clifton House, London
Challenge
The Clifton House lease expiry date was approaching in September 2022, prompting a full review of options available to NEL CSU who
declared the building surplus to their future requirements.
During the option assessment process (undertaken by the NHSPS office team, NEL CSU informed NHSPS that they were ceasing operation as an organisation in July 2022 (3 months in advance of the lease expiry date) and they required NHSPS’s assistance with coordinating their exit from the building as they were unable to fully resource the exercise
themselves.
Solution
Our team
- Assisted NEL CSU in understanding yielding up clauses in the lease, while our FM team handled furniture removal. An external building surveyor, appointed by NHSPS conducted a thorough dilapidations survey of Clifton House.
- This enabled NEL CSU to plan and budget for the anticipated dilapidation settlement sum, minimising the risk of unexpected financial implications on the NHS due to unallocated funding.
Impact
NEL CSU successfully vacated Clifton House in advance of the lease expiry date. This generated around £8 million in savings over a 5 year period for the NHS.
Buckingham Place, High Wycombe
Challenge
As a result of the Cabinet Office bringing in tighter restrictions surrounding the renewal of commercial interests across the NHS estate, the CSU were unable to continue with their 6-month
rolling licence at Buckingham Place.
Given the organisation still had a spatial requirement for the High Wycombe area, our office team undertook a holistic review of the public sector estate to assess demand and identify a suitable alterative option. This proved challenging as there were very limited options available within the desired search area.
Solution
Our team
- Faced challenges identifying a suitable vacant office for NEL CSU. They conducted a customer engagement exercise to explore shared office accommodation within existing NHS occupiers’ leasehold demises.
- Identified available space in Oxford Health NHS Foundation Trust (OFT) demise at Saffron House, next to High Wycombe station.
- Facilitated communications between OFT and NEL CSU, establishing a bookable desk / meeting room solution between the organisations.
Impact
The CSU and OFT agreeing to a bookable space arrangement generated around £54,000 per year in system savings for the NHS.
