Health board loses millions under new land sale rules

Published on Tuesday 29 March 2011 16:23

NHS Lothian faces losing tens of millions of pounds in land sales because of new rules which mean it cannot keep the proceeds of any property deals, it emerged today.

The new arrangement which comes into play tomorrow means that any money made from sell-offs has to be funnelled back into the national NHS pot.

The first project affected is the sale of the former Deaconess Hospital where the health board has struck a 4 million deal to sell it to a developer but won't see any of the cash despite facing a 55m black hole and having to cut 2000 jobs.

It also means future sales of the NHS Lothian estate - worth more than 600m - could go through without a single penny being invested locally.

The move has been criticised by unions and politicians, who pointed out the health board will pay an extra 5m this year after its business rates were hiked. Privately, health chiefs are seething at what is another financial blow from national level.

Tom Waterson, Lothian branch chairman of Unison, said: "This is unfortunate and a bit ridiculous when NHS Lothian has been paying the rates for these buildings which have increased in the last year. All health boards should be entitled to keep the money from land sales."

The Conservatives' health spokeswoman in Scotland Mary Scanlon added: "Many health boards have managed their estates very well over the years in order to plan financially for the future.

"This is a betrayal of that good management."

The sale of the current Sick Kids building at Sciennes will not be affected because its business case was agreed before this rule change becomes active on April 1.

However, plans to sell off parts of the sprawling Royal Edinburgh and Astley Ainslie hospitals, both on prime Morningside sites, as well as other smaller facilities in the Lothians, will be affected.

Land sales have been a great source of finance for NHS Lothian in recent years. Since 2000, more than 100m has been made by selling off a variety of properties, which works out at around a tenth of its annual budget.

Deaconess House - latterly the health board's headquarters before the move to Waverley Gate - will be the first to be lost under the scheme. Susan Goldsmith, director of finance for NHS Lothian, said: "We took the decision some time ago to bring corporate services together from across our sites to improve efficiency and provide better value for money.

"Our move to Waverley Gate was a key part of this strategy and Deaconess was put on the market.

"A preferred bidder has been appointed and their offer is being considered. The funds from the sale will be reinvested in NHS capital projects."

A Scottish Government spokeswoman said: "In cases where capital receipts were not part of financial plans already agreed by NHS boards and the Scottish Government, such receipts were pooled nationally to support a programme of capital investment in NHS Scotland."