Healthcare Features
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The Department of Health has issued guidance on the future of Primary Care Trusts’ Estate. Victoria Thourgood summarises the key points.
In August the Department of Health issued guidance on the future of Primary Care Trust Estates (PCT), in particular the transfer of property comprising “service critical clinical infrastructure” to aspirant Community Foundation Trusts (aCFT), other NHS Trusts and Foundation Trusts (FT) (together Acquiring Trusts).
If you are a landlord of a PCT Estate comprising service critical clinical infrastructure the implications are:
- You should expect to receive applications for consent to assign; and
- You should expect the applications to include a request for consent to a possible subsequent assignment to the Secretary of State.
If you are a PCT, you should be:
- Reviewing your estate in light of the guidance;
- Agreeing, with the Acquiring Trusts, lists of properties for transfer;
- Submitting the lists to the Strategic Health Authority, for approval, by 14 September; and
- Making applications for consent to assign those parts of the leasehold estate that are to be transferred, where the landlord’s consent to assignment is required or assignment is prohibited.
If you are an Acquiring Trust, you should be:
- Reviewing, with the PCT, which parts of the PCT’s estate you require in order to perform your services; and
- Agreeing, with the PCT, the property for transfer (or the principles for any alternative occupational arrangements where transfer is not appropriate, as set out in the guidance).
The abolition of Primary Care Trusts
The Health and Social Care Bill 2010 is currently before Parliament and it provides, amongst other things, for the abolition of PCTs. The Government intends that they will be abolished by April 2013.
Thoughts have turned to the arrangements for the future ownership and management of the estates of the PCTs and earlier this month the Department of Health issued guidance in respect of part of the PCT Estate.
The Department of Health guidance
This guidance covers leaseholds and freeholds of “service critical clinical infrastructure”. Typically these are premises in local settings integral to the provision of clinical community services including:
- Accommodation with high specification equipment, theatres or wards;
- Community hospitals.
It does not cover any parts of the PCT Estate that are not “service critical clinical infrastructure”, nor does it cover:
- Third party developments (3PDs) where the PCT have taken the head lease;
- NHS Lift sites;
- PFI/PPP sites;
- ISTC buildings.
PCT freehold and long leaseholds
PCT freehold estate is to be transferred at the Net Book Value shown in the PCT’s accounts at the point of transfer.
PCT leases
What should be assigned?
Whole leases should be assigned to the Acquiring Trust where they are to be the majority occupier.
Parts of leases cannot be assigned so sublettings to minority occupiers may have to be put in place first, before the lease is assigned to the majority occupier.
Landlord’s consent?
If a landlord’s consent to assignment is required by the lease or the lease prohibits assignment then landlord’s consent should be applied for as soon as possible.
Resistance will be futile as, under the NHS Act 2006, the Secretary of State for Health may order the transfer to an aCFT or other NHS Trust (but not an FT), and that order will be binding on a landlord notwithstanding any restriction or prohibition on assigning in a lease. Once enacted, the Health and Social Care Bill would provide that the Secretary of State may, in connection with the abolition of a PCT, make a property transfer scheme transferring property, rights and liabilities from a PCT to a permitted transferee. Acquiring Trusts are all permitted transferees.
Subsequent assignment to the Secretary of State
Any transfer of a lease should provide for the lease to be assigned subsequently to the Secretary of State (or a body nominated by him) in the event that the Secretary of State exercises its option to buy mentioned below). The application to consent should therefore include a request for further consent to the possible subsequent assignment to the Secretary of State (or a body nominated by him).
Timetable for transfer
- 14 September 2011: PCTs to have reviewed and provisionally agreed lists of property for transfer to Acquiring Trusts.
- 30 October 2011: Strategic Health Boards are to have approved the PCTs' lists.
- 15 December 2011: The Department of Health to have reviewed and signed off the Strategic Health Authority approved lists.
The transfer
Power to transfer
Currently there is no power to transfer the property to FTs. This will be in the enactment of the Health and Social Care Bill 2010. Therefore memoranda of occupation should be used as an interim measure. No transfers of land should occur by legal conveyance without the Department of Health’s consent.
In the case of aCTFs, transfer orders do not need to be made simultaneously with establishment orders, although the properties to be transferred must be identified in accordance with the timetable set out in the adjacent table.
Form of transfer
Although not yet available, there is to be a standard form for the transfer order which incorporates buy back provisions (see below).
All liabilities, obligations and any warranties relating to the site are to be transferred to the transferee e.g. contracts for estates and facilities management services and works associated with the buildings.
Secretary of State’s option to buy
The transfers are to be subject to an option for the Secretary of State for Health (or a body nominated by him) to reacquire individual properties in the event that the Acquiring Trust:
- Fails to retain a service contract;
- Vacates property;
- Ceases to exist; and/or
- Becomes insolvent.
The option applies if the whole or part of the building is affected. If parts of the building are still required for the delivery of community services, then appropriate occupancy arrangements may be negotiated.
Overage
If the Secretary of State declines the offer to have a lease assigned to it (or a body nominated by it), or declines to take a transfer of a property (either directly or to a body nominated by it) pursuant to its option, then the Acquiring Trust may (subject to any requirements of the lease or the title) dispose of its interest. Overage of 50% of any gain achieved, based upon gross proceeds of sale less the lower of the net book value at the date of acquisition or the net book value before any revaluation prior to sale, will be payable to the Secretary of State.
Situations where the entire PCT interest will not be transferred
In most cases the entire title will be transferred, but note the following:
- Where an Acquiring Trust requests a transfer of premises, they will have to take the whole of the estate deemed to be “service critical clinical infrastructure”. If this would lead to inefficiencies due to the Acquiring Trust already having its own estate, the PCT has discretion to exclude it from the transfer.
- In the event that an Acquiring Trust will be a minority occupier in property which has service critical clinical infrastructure, or needs to occupy surplus property, in the short term, an appropriate lease or licence, either co-terminus with the service contract or for a shorter period if necessary should be granted. The estate code (chapter 9) provides guidance on this.
- The estate should not be transferred where it is known that the Acquiring Trust will only be in occupation on a temporary basis.
Sites in multiple occupation
Where organisations occupy premises in the service critical clinical infrastructure category, which are shared by a number of users, the following principles are to be adopted (Note: “majority” is more than 50% of the lettable area):
- Transfer the whole to the majority occupier (provided it is an Acquiring Trust);
- If the majority of the property is vacant, the PCT is to retain for the time being;
- If the majority of the property is occupied by an organisation other than the Acquiring Trust, then the PCT is to retain;
- To establish the majority occupier, different GP practices and other primary care users should be aggregated and counted as a single occupier, as this will point to the property being used for delivery of primary care rather than community care.
Proper arrangements to document occupancy by minority occupiers (which may be an Acquiring Trust) and to agree the split of shared costs must be put in place by the PCT as soon as possible. Where property is to be transferred to an Acquiring Trust, this must be done before the transfer is completed.
Victoria Thourgood is a managing associate at Nabarro. She can be contacted on 0114 279 4154 or by email at
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The so-called “custody provisions” for the offence of corporate manslaughter have come into force today and will apply to organisations such as prisons and secure hospitals, the Ministry of Justice has confirmed.
The Corporate Manslaughter and Corporate Homicide Act 2007 created a new statutory offence of corporate manslaughter, whereby an organisation can be found guilty if the way in which its activities were managed or organised caused a death and amounted to a gross breach of a relevant duty of care to the deceased.
A substantial part of the breach must have been in the way activities were managed by senior management.
The 2007 Act came into force on 6 April 2008, except for the custody provisions. Today’s changes mean the law will “apply to deaths of persons owed a duty of care by virtue of: being detained at a custodial institution, or in a custody area at a court or police station, at a removal centre or short-term holding facility, transported in a vehicle or being held in any premises in pursuance of prison escort arrangements or immigration escort arrangements, living in secure accommodation in which the person has been placed, or if the person is a detained patient.“
This will cover custody providers including prisons, secure hospitals, police and juvenile detention facilities. The changes also extend the law to apply to Ministry of Defence and UK Borders Agency customs custodial facilities.
An organisation convicted of the offence could face unlimited fines, be ordered to change their polices and be forced to publish details of their fines.
“Today’s change increases the accountability of custody providers (public and private) under the criminal law,” the MoJ said.
In a circular, the Ministry added: “It is worth noting that the custody provisions do not create additional duties of care. All custody providers already owe duties of care to detainees, to the same extent that they do to e.g. their staff or the public, by virtue of one of the other duties contained in the Act. However, once the custody provisions are commenced the specific duty of care owed to detained persons will be relevant for the purposes of the offence in the Act.
Human rights group Liberty said the changes had finally rectified for certain people – often the most vulnerable and isolated – “a gaping hole in the government’s approach to protecting life”.
In its blog, it said: “The new offence means public bodies can now face prosecution if senior management failings amount to gross negligence and result in the death of someone in custody. This was a provision that Liberty, alongside other campaigners, fought hard for when the Act was being passed. When the Bill was tabled it applied solely to private organisations – only intense lobbying secured an amendment extending its remit to public bodies as well.
“Before today, if a detained mentally ill person died in hospital, a prisoner hanged himself in his cell or a foreign national died while being deported, there was no formal corporate accountability available; no enforceable sanction for the deadly institutional and systemic failings that may have been responsible.”
Liberty said it remained concerned about the extent of exemptions under the 2007 Act, and the high threshold required for charge. However, it said the new offence was crucial.
“It will ensure accountability and encourage best possible practice to try and minimise the risk of deaths in custody,” the group added.
According to Liberty, there have been 333 deaths in police custody over the last decade or so, “not to mention deaths in other detention facilities nationwide. Let’s hope the introduction of this new offence will cut that number”.
Philip Hoult
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A writ of habeas corpus has been granted against an unnamed local authority after a judge decided a patient had been unlawfully detained in a mental hospital and his mother had been given misleading advice as to her rights.
The case of ‘CX’ against the authority and an NHS trust, also unnamed, was heard by Mr Justice Spencer in the Administrative Court.
CX was detained under section 3 of the Mental Health Act 1983 on 22 December 2010 on the application of an approved mental health professional employed by the local authority.
It was argued that his detention was unlawful because of a lack of proper consultation with his mother, and because she was misled as to her statutory rights when she withdrew her objection to the application for his detention.
CX is 21 and suffers from schizophrenia. On 30 November 2010 he was compulsorily detained for assessment for a period due to expire on 27 December.
His mother was unhappy with the care given but the treating psychiatrist felt CX was a danger to himself and others and asked for a section 3 assessment.
The act though says that any hospital admission under section 3 cannot be made where the person’s nearest relative objects, or has not been consulted.
The judge said it was for the local authority to satisfy him that CX’s detention was lawful and that it “failed to persuade me that there was sufficiently informed consultation with MX [CX’s mother] to satisfy the requirement of the Act that the nearest relative be consulted before the section 3 application was made”.
He was also not satisfied that MX made a “full and effective” withdrawal of her objection to CX’s detention.
“On the contrary, I am driven to conclude that her withdrawal of consent was initiated by the incorrect and misleading advice she was given that she could only maintain her objection in the face of a displacement application if she was legally represented in the court proceedings which would follow,” the judge said.
“I should add that even if the burden of proof had been the other way round, I would have been satisfied and sure on all the evidence before me of the matters which I have found.”
He granted an immediate writ of habeas corpus but said the case had turned entirely on “its unusual facts”.
“My findings are not intended to prescribe, and must not be interpreted as prescribing in any way what may or may not amount to sufficient consultation in another case,” the judge said.
“Each case is different and what is required by way of consultation will depend upon the individual facts and circumstances and upon the personalities of those involved.”
Mark Smulian
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Barlow Lyde & Gilbert has reaffirmed its commitment to handling local government and public authority work ahead of its merger with Clyde & Co.
The two firms are to merge on 1 November 2011 in a deal that will create a combined practice with 270 partners, more than 1,250 fee-earners and 2,250 staff across 27 offices. However, it has been reported that a number of BLG partners are set to leave as part of the deal.
A spokeswoman for Barlow Lyde & Gilbert said: “The rationale for the merger has been to bring together the broadest range of market leading practitioners in the insurance and related liability areas. The Casualty and Healthcare practice, which handles the majority of our local government/public authority work, has been and remains one of BLG's market leading practices, and will form one of the key departments of the combined firm.”
The combined firm will be known as Clyde & Co and have a turnover in excess of £300m. Management said opportunities would be explored to retain elements of the BLG brand “recognising its heritage and leading status in areas such as professional liability and catastrophic injury”.
The two firms have already allocated a number of roles post merger. Michael Payton, senior partner of Clyde & Co, will be senior partner, while his BLG counterpart Simon Konsta will take a role on the board. David Jabbari, CEO of BLG, will become chief operating officer and – together with a third, as yet unnamed partner from the firm – also have a seat on the board.
Peter Hasson, chief executive officer of Clyde & Co, will be chief executive of the merged firm. He said: "Given the positive reactions from both our partnerships and the market, we are now in a position to move forward vigorously. We have immense respect for the partners, lawyers and staff at BLG, whose practices complement rather than duplicate those of Clyde & Co.”
BLG’s Jabbari said: "The merged firm will represent one of the very top dispute resolution practices, while the combination of the two leading insurance law firms will provide the market with a breadth and quality of offering that will be difficult to match.”