Ryhurst has developed a joint venture model, “STEP” (Service Targeted Estates Partnership) which it claims, “unlike other approaches such as PFI and NHS LIFT”, provides genuine sharing of the “risk” involved in developing and maintaining both existing healthcare buildings and new facilities.
Ryhurst, the healthcare-focused land and asset solutions arm of construction and development company the Rydon Group, says it is in “detailed discussions with 6-7 Foundation Trusts, PCTs and other healthcare organisations” about the model, and has another 40 “seriously interested” in the concept, under which the care provider, be it an NHS Trust or a private sector organisation, becomes a joint shareholder in a new company. Ryhurst obtains the capital for new building or refurbishment, with the care provider generally supplying the land. Once a deal is agreed, the “STEP” company takes responsibility for all capital works-related activity on the estate and, once service delivery has commenced, manages and maintains these functions. On the development’s completion the care provider rents the space from the JV company, with the cost based on the extent of services provided. This, Ryhurst business development director Stephen Collinson told HEJ, enables a Trust either to continue taking responsibility for certain estates functions, or, if it prefers, to hand over all EFM to the STEP company. He added: “The care provider has up to a 50% equity stake in the development, but much less risk than in a conventional NHS set-up, and can opt, at a stipulated date, either to exit the agreement, or to buy out its JV partner.” Stephen Collinson also emphasised that, due to the establishment of a private joint venture company, and in contrast to the situation with “traditional” NHS-owned properties, STEP developments should also sit “off-balance sheet” under new EU international accounting regulations, meaning that care providers will not have to pay annual capital public dividends. He said: “All the indications are that PFI and LIFT-run healthcare facilities are now having to go on balance sheet, while another significant drawback of existing NHS property ownership models is that many Trusts are sitting on empty or poorly used space but still having to pay for it.” Stephen Collinson, who has 28 years’ NHS, independent and voluntary sector experience as a senior manager, including at CEO and Board level, added that STEP not only builds on the positive features of existing procurement and delivery models, addressing the risk and reward balance in these that Ryhurst believes are “unhelpful and unsustainable”, but also assures “transparency of investment returns”
