How real estate consultants support health service managers to meet challenges

Demanding requirements for clinical environments and squeezed budgets across the NHS are two of the key challenges for real estate professionals working in the health sector in the experience of property and construction specialists Watts Group. 

The NHS is one of the largest landowners in England. 

For consultants used to working on commercial projects, it is vital to understand that different priorities apply with the NHS and other health environments, experts at Watts say. 

For example, the NHS is seeking ways to manage land and buildings beyond delivering healthcare in ways that have a positive social, economic and environmental impact.

Rob Burke, the Lead Director for Building Surveying in London and the South at UK-wide Watts Group, says those challenges are manifest on NHS projects of all sizes from major fitouts to minor maintenance programmes and even new builds.

For anything affecting existing real estate, there is a third hurdle that makes finding solutions in hospital environments particularly tricky – lack of space. That’s something that these days doesn’t generally affect modern office buildings since the move to agile working freed up acres of floorspace and opportunities to reconfigure, downsize or relocate.

Space efficiency

In 2016, a report by Lord Carter highlighted the potential to save more than £1 billion by enhancing estate efficiency across the NHS in England. In the nine years to 2023, the cost of occupying and operating buildings across NHS secondary care fell 2.5 per cent to just under £12 billion, and the amount of floor area per patient attendance fell by seven per cent. Those falls came against a backdrop where the number of patients using the facilities rose by nearly 14 million.

Space in existing hospitals is frequently squeezed to capacity and sometimes beyond. Fluctuation in demand for space, for example during winter flu outbreaks, is another factor that is pretty alien to the commercial sector.

Even so, a talented project manager would be able to make useful recommendations for changes to a hospital layout that could improve efficiency and optimise space usage. 

Watts Group has experience in data collection for the NHS and is discussing a project with an NHS provider that has taken on additional real estate and wants to ensure that its use of the space is optimised. It is also on the framework for project managers at University College London Hospitals (UCLH).

The company has performed audits on NHS properties ranging from high level technical and strategic reviews to the more prosaic such as the study of a single room to assess how it could be reused. 

“Often, the first priority is for NHS managers to get a handle on what real estate they have,” explains Rob Burke. “With accurate data, it is much easier to make the right decisions about how to manage that space going forward.”

Part of that process will be assessing which spaces might be reused in specific ways. For example, some rooms might be repurposed for radiography while others would be unsuitable for conversion. 

This kind of fact-finding exercise can also be invaluable in assessing pinch points where a shortage of space is creating bottlenecks and pointing out potential solutions.

Breadth of Experience

Watts Group is currently managing Technical Due Diligence (TDD) on the possible acquisition of 100,000 sq ft of mixed-use accommodation for an NHS client in the Midlands. 

The project is imperative as the client is considering a very long lease on the building. The Watts team’s role includes a full TDD survey of the building and its services, as well as dilapidations advice to estimate the likely costs for capital repairs and replacement up to the first break clause in the contract in 12 years.

Examples of other NHS projects in the Group’s pipeline include:

• Full TDD of a former private healthcare campus for the local NHS trust, including advice on the condition of the buildings and recommendations for repair and upkeep.
• Specialist M&E services at a hospital campus involving survey of below-ground infrastructure and demolition of some buildings.
• Full TDD for an NHS Trust looking to take a long leasehold of part of a multi-occupier office building. 

Clinical challenges

The challenges with working in clinical environments compared with most other kinds of real estate are fairly obvious, but one of the effects of this is that it makes extending clinical spaces to new locations much harder than other use types.

“In particular, you can’t easily repurpose other kinds of real estate for clinical purposes,” says Rob. “At the most basic, if a hospital was to take one floor of an office block that was mostly occupied by commercial tenants, there would be problems with large numbers of patients visiting the shared reception area.”

Converting such a space to health needs away from central resources in the main hospital would be difficult if not impossible. In the main hospital, it’s possible to quickly mobilise high performance flooring or clean air kit but away from the complex, that would not be so easy.

Challenges like these require lateral thinking, says Rob. “For example, could moving the accounts team to an office free up space in the main hospital that could more easily be repurposed as, say, a treatment room or operating theatre?” he asks. 

Compliance

Another major driver affecting real estate decisions in the NHS is compliance.

When it comes to compliance, different rules may apply to maintenance of different spaces across a hospital estate, for example. “A tear in the floor covering of an office might not be a priority for repair but the same damage in a clean environment would need urgent remediation,” Rob points out.

Construction

When it comes to new builds, Steve Harper has first-hand experience of multi-million-pound projects with household name hospitals.

Budgets for these kinds of projects may be enormous but that doesn’t allow for any profligacy, says Steve, who is National Director of Cost Management at Watts Group.

“With any project, you have to be cost conscious,” he points out. “As QS on these projects, you are always looking at ways to value engineer and get the maximum from the contractors. It’s about making sure you understand the brief and that your tender documents are completely accurate.”

Compared with the private sector, Steve’s experience is that there is more scrutiny over expenditure because these projects are financed by public money and charitable donations.

Typically, QS are reporting to senior management of the NHS Trust as well as the Trust’s real estate team with very strict requirements including explaining the details on changes to the construction programme and budgets and allocating responsibility for those.

A factor affecting many health estates is their location in built up areas. New works may attract noise complaints, despite being in the public interest. Road congestion is an issue, especially in emergencies. At St George’s Hospital at Tooting, London, Steve managed a contract that included a helipad on the roof of one of the blocks for an emergency ambulance. When estates can’t expand, sometimes the only way is up, and Steve was involved in a project that saw an additional storey built on top of an existing building at Royal Marsden, Chelsea, to increase space.

Despite those constraints, the work is fulfilling. “It is interesting, varied and you have a sense of satisfaction about helping to create new lifesaving facilities,” says Steve.

His prior work with the health sector includes: 

• The £18 million Oak Centre for Children and Young People at Royal Marsden, Sutton, opened by the Duke and Duchess of Cambridge. A complete new build, it features a roof terrace with a living wall.
• The new main entrance for Guy’s Hospital, which is used 11,000 times a day and features a projecting canopy and revolving doors to minimise draughts. A key issue was delivering the work while maintaining the use of the entrance.
• Conversion of an operating theatre to a state-of-the-art ‘cyberknife’ treatment centre at Royal Marsden Hospital. The £1.7m project took 43 weeks to deliver.
• For Guys and St. Thomas’ NHS Foundation Trust, Steve worked on the £0.9m refurbishment and renovation of the hospital’s Shepherd Hall Restaurant, including the servery area, entrance corridor, back of house areas and services work in the basement.
• A massive radiotherapy project in a basement at Royal Marsden, Sutton, with two-metre-thick concrete walls to protect the surrounding areas from harmful radiation and piling to support the structure.
• At London Hospital, Whitechapel, refurbishment of a row of terraced houses converted into an occupational therapy facility. 

Maintenance

Watts Group’s Vickie Oni has first hand experience of managing NHS real estate at the coalface. Prior to joining Watts, she was embedded with two NHS estate maintenance teams, firstly at Watford General Hospital and then at Royal Free Hospital.

Now a Project Manager at Watts, she says the multitude of maintenance issues and other challenges facing most hospitals would in almost all cases be best solved by rebuilding the entire facility. That is not entirely out of the question.

Ambitious plans announced by the previous government for 40 new hospitals are progressing, though the definition of a new hospital has been somewhat watered down.

Nevertheless, in a “start from scratch” scenario, M&E teams such as those at Watts Group can build strategies and technologies into the design, for example to minimise the spread of pathogens, that would go beyond anything possible in a smaller-scale refit. 

Even at that smaller-scale level, however, there is still much scope for improvement under the M&E banner with improvements such as installing technology like advanced air filters and bacterial screens. 

NHS budgets don’t generally have the ability to allow for a wholesale rebuild of the entire health sector estate so in most existing hospitals, there is a sense among managers and maintenance teams of trying to make things work even when it feels that the odds are stacked against you, explains Vickie.

The process begins with the Quality Care Commission setting budgets for the hospital that need to be distributed and used within the year for which they are allocated. 

Senior members of the maintenance team will tour the hospital and prioritise what needs to be done, on both the patient side such as a ward refit and the staff side such as upgraded staff facilities.

Once maintenance is scheduled, it is not always as simple as carrying it out, Vickie recalls. “If we were looking at refurbishing a ward, for example, we would often come across blocks in the road, generally technical issues, and these would frequently have a knock-on effect. An asbestos survey could suggest specific work to address an issue but a related review of air quality might also raise questions about how old the hospital’s M&E systems are.

Nowadays, Vickie is working on fire remediation projects across public and private sectors, and finds a stark contrast between the process and the way that maintenance is managed in the NHS.

Whereas in the long-established, budget-strapped health sector, maintenance teams are used to being flexible about how work is carried out, the relatively-new building regulations, particularly around fire safety, leave no room for manoeuvre.

People Power  

In the NHS, there are a lot of people involved in decisions and a lot of approvals required, even down to the choice of paints that can be used. 

It is usual for multiple people, both in-house NHS managers and private consultancies, to be involved with new builds, refits and estate maintenance, whereas in the private sector, whether residential or commercial buildings, there might be a single point of contact.

Last Word

From basic estate maintenance to new builds, the expertise of project managers, M&E consultants and other real estate professionals can be invaluable. For their part, the consultants have to understand the NHS environment and adapt their thinking and methodologies to maximise value.

Watts Group Limited
+44 (0)207 280 8000
london@watts.co.uk