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NHS Estates and Facilities: setting up a subsidary company to maximise value

Updated: Aug 17, 2021

The NHS estate is a precious asset. Effective management of land and buildings is critical for delivering high quality patient care, and doing so within the constraints of a limited budget. The 2017 review by Sir Robert Naylor examined how the NHS can make the best use of its estate. It has shined a light on its importance as an ‘enabler’ to health reform and in delivering the ambitions of the NHS’s Five Year Forward View.

An option for NHS bodies seeking to maximise the value of their estates is to set up a subsidiary company.

Under this arrangement, staff and assets are transferred to a subsidary company, owned by a Trust or other NHS body. Services are provided under contract, akin to an outsourcing arrangement. Depending on ownership, any surplus can be reinvested or returned to the Trust as profit. Staff can remain on NHS Terms and Conditions with access to the NHS pension.

Setting up a subsidiary offers a number of opportunities to realise savings, operate more effectively and generate income. The potential benefits include:

  • Allowing a focus on estates – as a separate company, the subsidiary can maintain a clear focus on estates. This provides the opportunity to manage services differently, transforming services and reducing running costs, sharing buildings

  • Achieve long term sustainability – for example providing facilities services to other NHS Trusts or simply running the current service in a more efficient way

  • Better staff terms and conditions – where appropriate, staff could be employed on terms and conditions that aid recruitment and retention

  • Providing freedom to innovate – the subsidiary provides the opportunity to ‘do things differently’, for example releasing surplus and under-used land for development or reconfiguring buildings.

Our offer

Mutual Ventures can work with you to help you consider the options around setting up a subsidiary company, and implement a solution. We work with partners with expertise in estates, legal and VAT to provide a comprehensive range of support.

Key areas where we can provide support are:

  • Determining service configuration – analysis to determine which mix of services would benefit from being part of a subsidiary company.

  • Options analysis – evaluating the options for organisational design, including legal form, governance and ownership. Ensuring the model to complies with all statutory requirements.

  • Testing your business case – an in-depth assessment of the aims, benefits, risks and sustainability of your preferred option, including financial modelling.

  • Business planning – thinking through the right approach to ensure the chosen model can deliver on its promise, and has the right systems to support it.

  • Stakeholder engagement – working with your partners, staff and patients (as appropriate) to create a shared vision, and address the barriers to working together.

  • Implementing your plan – expert project management support to make the plan a reality, including ensuring legal, contractual, procurement and tax matters are resolved

To learn more about how we could help you contact Andrew Laird on


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