Saving the NHS over £500,000 by renegotiating leases

In reviewing their estate, the Torbay and South Devon NHS Foundation Trust decided to condense their operations which would involve vacating the space, leaving in summer 2018.

The local Clinical Commissioning Group (CCG) reviewed its requirements and subsequently declared the property surplus, and were able to enter the scheme in to NHS Property Services’ Vacant Space Handback Scheme.

NHSPS had various options with this site, namely; subletting part of or the whole site, re-assigning the property, or surrendering it. Surrendering the lease would relieve NHSPS of all future liabilities of the site, and so this option was chosen.

It wasn’t going to be easy to satisfy the landlord on this (as a government backed organisation like NHSPS is a strong covenant for a landlord), and so we sought to secure a new tenant to assist with the deal.

The basis of the agreement means NHSPS will release this property from the NHS estate, and walk away with no future or potential future labilities, for a cost equivalent to 12 months’ rent (£58,000). This includes the potential dilapidations claim which would have come into play at the end of our term in 2024 and was estimated at circa. £100,000 by both NHSPS and the accountants’ building surveyors.

To have achieved a favourable outcome such as the above in a timescale of just 3 months from handback has been a fantastic result and will see a saving to the wider NHS of just shy of £550,000.