Paper 15
Ayrshire and Arran NHS Board
Monday 20 August 2018
Declaration of unused land as surplus to NHS Ayrhsire & Arran requirements
Author: Sponsoring Director: Greg MacKenzie, Property Transaction John Wright, Director for Corporate Support Manager Services
Date: 13 July 2018
Recommendation
The Board is asked to declare unused land at Ayrshire Central Hospital and Standalane, Stewarton surplus to Ayrshire and Arran Health Board use.
Summary
The unused land at ACH and the land comprising the roadway at Standalane, Stewarton is owned by the Scottish Ministers per Ayrshire and Arran Health Board. The land is not being used for the provision of healthcare services and there are no plans to use this land for this purpose.
As per the mandatory guidance in Chief Exectuive Letter 8 (2011), within the Property Transactions Handbook Section 1, Clause 1.10, NHS Boards must declare non- operational or unused property surplus.
Key Messages:
To reduce the size of the NHS Ayrshire & Arran estate, reducing backlog maintenance liability,ongoing maintenance costs and any potential liabilities arising from adverse events on the vacant land.
To potentially obtain income from the sale of the land, generating additional funds to enhance and improve patient care.
The sale of the land will bring vacant sites back into use for the benefit of the wider community.
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Glossary of Terms
ACH Ayrshire Central Hospital CEL Chief Executive Letter CLO NHS Scotland Central Legal Office EAC East Ayrshire Council NAC North Ayrshire Council NHS A&A NHS Ayrshire and Arran PAMS Property and Asset Management Strategy PPM Planned and Preventative Maintenance Programme PTHB NHS Scotland Property Transactions Handbook
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1. Ayrshire Central Hospital
It is now approximately 12 years since initial consent was given to declare the vacant land surplus. Since then, there has been significant change in both NHS A&A’s use of the land and actual ownership.
The land shown on the plan on Appendix 1, extending to 9.37Ha, is currently declared surplus to NHS A&A use, whereas Appendix 3 shows the current vacant land, following a number of major developments on the site over a number of years.
The Estates, Environment and Sustainability Group; the Capital Programme Management Group; and the Corporate Management Team have recommended that the surplus land identified in Appendix 3 be declared surplus.
1.1 Background
A diagram showing the timeline of the disposal process to date is show within Appendix 2, to better understand the sequence in which events have happened over the 12 year period. This can be divided into three phases: a) Initial Phase December 1997 – March 2008 – A tree preservation order was issued by North Ayrshire Council in 1997, and has a material effect on the developable area and the potential price the Board can achieve. The key period of this initial phase was from June 2006, when the initial land became surplus as a result of the Maternity Block closing. The area then increased when NHS A&A acquired additional land from Community Scotland Land. This extended to 9.37Ha. as shown in yellow in Appendix 1 for the first phase of the proposed disposal and formed the basis of the surplus land along with the land to be used for the proposed joint access road. b) Disposal Phase January 2008 – December 2009 – The surplus property was subject to a number of enquiries through a detailed disposal process, resulting in a short list of 2 developers: Stewart Milne and Keir Homes. The global financial crisis however, affecting both development capital and mortgage lending, led to the withdrawal of the offers. There was a subsequent interest from NAC in respect of land for a possible replacement for the Magnum Centre, although the Council ultimately developed a site nearer to the town centre. c) Relaunch Phase December 2013 – December 2017 – The site was deemed too large for developers following the financial downturn and with the added complications of the listed buildings on site and the uncertainty over access arrangements with the North Ayrshire Community Hospital/Woodland View development, there were no new enquiries about the site for a number of years. In order to develop a new disposal strategy, a site master planning exercise was undertaken in February 2013, including input from the public and stakeholders. This process became the Final Development Framework. This formed the basis of the report into market realisation by Ryden on August 2015, taking into account the affect of ground conditions and the listed buildings on the likely capital receipts, which would negatively affect the projected disposal income. The Board made an application to Historic Environment Scotland in August 2017 to have the former Training & Residency Building and a Gatelodge removed from the historic listing. This was rejected, but the Board was encouraged to seek demolition consent, as the correct route.
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1.2 Assessment
It is in the Board’s interest to declare the land surplus and bring it back to the market in order to obtain a capital receipt. If this can be realised, the income can be reinvested into healthcare. Due to high levels of vandalism, this would also relieve NHS A&A of high ongoing security and maintenance costs.
The revised site area shown in Appendix 3 shows the currently unused area. The original surplus site, shown in yellow on Appendix 1 excluded other land now vacant due to onsite demolition work.
The area shown in Appendix 3, extending to 13.8Ha approximately is the current extent of the unused land within the Ayrshire Central Hospital site and is the area the Board should consider in its assessment of declaring the land surplus.
The capital disposal value is currently £1.2m, but based on experience of previous disposals of large sites, it is likely this receipt is unachievable based on abnormal costs. These would include the Listed Buildings; potentially diverting ground services (water, electricity, gas, as well as the culverted Red Burn); contributions to local authority as part of development contribution; and ground conditions from previous surveys.
There would also be potential significant savings both in terms of security costs as above, estates maintenance costs, as well as a backlog maintenance liability of £5.5 million for the Training & Residency Building.
2. Standalane, Stewarton
NHS A&A received a letter in July 2017 from Barnetts Solicitors, Kilmarnock on behalf of their clients Mr and Mrs X, seeking to purchase, at nil cost, the land forming the roadway of Standalane, Stewarton, which they said was within the ownership of the Scottish Ministers per Ayrshire and Arran Health Board.
2.1 Background
The NHS Scotland Central Legal Office provided a title report confirming NHS A&A own land at Standalane, Stewarton, this is shown in pink in Appendix 4. Their predecessors, the Board of Management for Northern Ayrshire Hospitals, were beneficiaries under the Will of a David Dunlop. The named beneficiary in the Will was Kilmarnock Infirmary, but by the time of the Disposition by the Trustees of David Dunlop to the Board of Management for Northern Ayrshire Hospitals in 1958, the assets of Kilmarnock Infirmary had become vested in that Board. By succession, it is now within the ownership of the Scottish Ministers per Ayrshire and Arran Health Board. The Land owned by Mr & Mrs X, is shown bounded by the bold black line adjoining NHS A&A land in Appendix 4.
2.2 Assessment
The issue is the ongoing liability related to the land. On seeking advice from our Health and Safety Department, the advice was it is the duty of NHS A&A to maintain the road. This should therefore be part of NHS A&A Estates Planned and Preventative Maintenance strategy and managed accordingly.
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As there is no active clinical or service use for the road and because of the likelihood of incurring costs over time, it is recommended that the land be disposed of in accordance with the NHS Scotland Property Transactions Handbook.
The Property Adviser has provided a report stating there is nil value associated with the land. NHS A&A nevertheless still has to seek best value in accordance with the NHS Scotland Property Transactions Handbook, so will advertise the land and invite Mr & Mrs X to submit an offer.
3. Recommendation
The Board is asked to declare the land at ACH and Standalane, Stewarton surplus to NHS A&A use and to recommend the disposal of the land thereafter, in accordance with PTHB guidance.
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Monitoring Form
Policy/Strategy Implications By declaring the land surplus and the intended disposal forms part of the NHS A&A Property and Asset Management Strategy, which itself is underpinned by all local and national clinical strategies and the NHS Board’s approved Estates Strategy.
Workforce Implications There are no staffing or workforce issues as both are vacant land with no active staff.
Financial Implications The land at ACH is on the Asset Disposal Register with a disposal value of £1,200,000. There would be additional revenue cost savings from operational and security costs.
Standalane, Stewarton has been valued at nil value, the intended disposal is to avoid potential liability and associated unplanned financial cost and is not about achieving a capital receipt. NHS A&A will attempt to recover the legal costs associated with the disposal from the potential purchasers
Consultation (including Both sites have been recommended to be declared Professional Committees) surplus by the Estates, Environment & Sustainability Group, Capital Programme Management Group and Corporate Management Team.
Risk Assessment There is a risk no party comes forward to purchase the land, which means the operational savings would not be realised. Until the land is sold, there can be no revenue savings. There is a risk of not achieving the disposal value of £1,200,000, due to abnormal costs, as highlighted above. A Property Adviser and Special Adviser (e.g. consulting or structural engineer) to carry out a survey to form a risk assessment and disposal report.
Best Value It is the responsibility of NHS A&A to ensure that all property, sales, are at a price and on other conditions which are the best obtainable at that time having regard to the mandatory requirements.
- Vision and leadership The efficient and effective management of transactions will assist NHS A&A to achieve the best outcome for the public interest.
- Effective partnerships As set out in the NHS Board’s approved Estates Strategy.
- Governance and CLO and Property/Special Advisers, EAC & NAC accountability Estates, Environment & Sustainability Group; CPMG;
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Corporate Management Team. - Use of resources Professional advisers are procured through quotes/tenders in accordance with procurement guidance and through the Public Contracts Scotland website. - Performance management Estates, Environment & Sustainability Group; CPMG; Corporate Management Team; Annual Board Financial Audit (Property Transaction Audit).
Compliance with Corporate Compliant with the NHS Board’s approved Estates Objectives Strategy.
Single Outcome Agreement Consultation with both NAC and East Ayrshire Council (SOA) was carried out for the respective properties. NAC have an ongoing interest in purchasing the ACH site.
Impact Assessment
A high level Standard Impact Assessment has been carried out on the NHS A&A disposal process. As this is a recurring event, the Standard Impact Assessment applies to all transactions.
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Appendix 2
Ayrshire Central Hospital Disposal: Key Dates
10/12/ 97 30/06/06 JAN 2007 08/03/07 15/02/07 17/05/07 18/06/07 Approval Declared Condition Declared Early Warning Disposal Disposal Strategy TPO Surplus Survey Surplus Trawl Strategy PSMT
Surplus land Area trawled Ryden Disposal Disposal Strat egy Tree Preservation Clinical premises Nurses Residential Order.PSMT ID: No 3 proposedPSMT site, Home, Currie & Brown 5.28 Ha & 4.09 Ha Phase 1: 9.37 Ha). Strategy Report Report approved (9.37 Ha) (issued by North 1.48 Ha survey Hospital by Capital Planning Ayrshire Council) Hospital Group
25/10/07 28/03/08 2008 2008 2008 08/08/08 Hospital Final Hospital 22/12/09 CS Land Pre Qualifying Developers Developers Disposal of HospitalTrawl Hospital Informal Purchased Questionnaires Short List Short List Surplus Land Offer
NAC informal offer: Community Scotland Part 1 Part 2 Stuart Milne Ryden Disposal Area trawled replacement of Land adjoining & lying to the 11 responses 6 developers Homes (SMH) & of Surplus 25 Ha (61.8 acres) IrvineHospital Leisure Centre South East of ACH purchased receivedHospital short listed Kier Homes short Land Strategy Phase 1: 9.37 Ha listed (Magnum) by NHS A&A Hospital
Hospital Hospital Hospital Hospital
Feb 13 10/04/14 11/11/13 09/01/15 Feb 2015 Mar 2015 11/08/15 Masterplan Final Masterplan Sale of Interim Residential/ Final appointment Development Hospital Consultation Eglinton Land Report Training Building Report Framework
rd GVA instructed to GVA public and GVA Masterplan Sale of land for 3 Ryden: Report on Ryden marketing Ryden: Report on renamed – party development for Of Residential/ Potential Capital produce a stakeholder’s Potential Capital Masterplan for site. exhibition Development Eglinton GP’s Realisation of Surplus Training Building HospitalRealisation of Surplus Hospital On ACH site Framework Land Hospital Land Hospital Hospital Hospital Hospital Mar 16 Dec 17 Residential/ Application Training Building For De-listing Hospital
After 1 year of Historic Environment marketing, no Interest Scotland rejects application to remove Training & Residency in the Building noted by Ryden building from historic Listing Hospital Hospital Created by Debbie McCulloch, NHS Ayrshire and Arran Property Services,18 July 2017
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