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Community Health Partnerships (CHP) has long been recognised as one of the major unsung success stories in the UK PPP market.
Unlike many of its contemporaries, it has managed to navigate three different governments (and seven prime ministers) since it was established, helping to deliver and maintain a range of primary and community healthcare facilities such as GP surgeries and local care centres.
However, the agency is now gearing up to tackle what could be its biggest challenge yet: contract expiry.
And while much has been said and written about PFI expiry and handback, the Lift portfolio sits in a somewhat different space: rather than seeing assets handed back to the public authority at the end of the contract, the default is to revert back to the Lift companies, that remain as PPPs, creating a whole set of considerations that are separate from the narrative of most PFIs.
“Our range of issues are quite different to most PFIs,” says Nafees Arif, chief financial officer at CHP. “The level of negotiation that will take place is greater.”
While contracts will naturally default to the Lift companies, CHP and its public sector partners do have the option to buy the assets, but a decision to do so will need to be made on a case-by-case basis, based on the infrastructure needs of the NHS and local health systems.
As a result, CHP has already started the conversations over what the integrated care systems (ICSs - the bodies that were established to deliver joined-up health and care services) will need in the future. Although the first Lift contract won’t expire until the summer of 2029, carrying out these conversations now will be important to get ahead of the various work that will need to be done - especially if a decision is made to retain an asset.
“We are heavily engaged on this now,” says Arif. “We are leading the conversation on this. We are working on areas such as service planning and the potential of investing in facilities.”
The future of the Lift assets is inextricably linked to NHS Estates and infrastructure strategies currently being developed by the ICSs. CHP is focussing efforts to support ICSs’ in understanding the place these assets play in delivering care going forward. The organisation does expect most if not all these assets will be needed in the future, as they are well maintained and some of the best community-based estate available.
The issues become more complex when considering the funding required and particularly the impact on the capital departmental expenditure limit (CDEL), with the capital settlements being constrained.
Arif says CHP is already in the early stages of discussing the capital needs as Lift contracts expire, to work out how much capital might be available to secure them for the future. CHP has been holding a number of webinars to raise awareness among all stakeholders, as part of its efforts to engage early.
“The earlier we can approach this, the better,” he adds.
Like many of the early PFI deals, Arif says a lot of Lift contracts are silent on what happens at expiry - other than that they are to be returned to the Lift Company by default.
“Every building is different, so there will be a nuanced view,” he explains. “There will be more of a ‘cookie-cutter’ element in some of the later waves, but you can’t make an assumption on any project and each one will need to be looked at individually.” This makes Lift contract expiry a significant programme of work requiring the requisite resources.
And as has been noted across the industry, there is a significant lack of expertise in the UK market to deal with expiry, with many of those who had been involved in the market having either left the sector or left the country to support programmes in other parts of the world. Arif suggests CHP can play an important part here.
“We are looking at the role we play, bringing in expertise and knowledge. We work closely with our private partners because of the unique position we have on the Lift company boards. So we have generally good relations with them.”
Arif is keen to underline that this work is not about bringing the Lift programme to an end - but more about ensuring buildings are providing services in a sustainable way for years to come. He explains: “Language is key and for CHP we believe the best outcome for the NHS and patients at a time of constraint is to ‘secure the future of the Lift estate’, rather than ‘handback’. It is about putting the work in for the future; there is a lot going on behind the scenes. We are actively supporting the NHS in securing these assets for the future.”