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Sir Robert Naylor |
Hospital plays property developer
UCLH boss says health trust wants to buy new sites to create specialist centres
A HOSPITAL chief executive wants to flatten large parts of Bloomsbury to make way for new specialist health centres.
Sir Robert Naylor told the New Journal that University College London Hospital is “trying to gradually acquire” land in the neighbourhood.
He is confident that the hospital has proved its ability to wheel and deal in the property market by selling the Middlesex Hospital building just before prices started to dramatically crash. Although no longer a concern for UCLH, the future of the site is currently in confusion after property developers, the Candy Brothers, pulled out of a massive construction project.
Sir Robert has in mind a series of ambitious plans to open world-leading centres on a series of sites in the area and said he will persevere despite fears that changes to accountancy rules could wreck the hospital’s chances of borrowing money.
From April, the government wants all hospitals involved in Private Finance Initiatives – the funding system which helped UCLH embark on a massive rebuilding programme – to declare its debts.
And if the debts on the balance sheet are too high, the hospital might find lenders needed to finance further work hard to find.
Sir Robert admitted the hospital trust was “in a position of vulnerability” and that his team of financial experts had spent “a lot of time” monitoring changes.
Under the PFI scheme, a partnership between the private and public sectors, a consortium of building companies called Health Management UCLH (HMU) was contracted to build the £422million public hospital and £70m Elizabeth Garrett Anderson wing.
The deal, fixed in 2000, means the trust must repay £31.4m each year to HMU until 2040 – £1billion in total.
The appeal of PFI for UCLH bosses was that the massive debt could be kept off the trust’s “balance sheet”, allowing for extra borrowing.
But that is all set to change in April when the new accounting rules come in.
Sir Robert said: “Because ours is the biggest completed PFI in the history of the health service, obviously we are in a position of vulnerability in this whole discussion.
“We have gone into this in quite some detail. What will happen is that the amount we can borrow is related to our financial strength and therefore it will have an impact on our ability to borrow.
“We will have to change our borrowing rules, as in to what extent we can go out into the market place.
“At the moment we could borrow in excess of around £100m. That £100m is based on today’s figures. If we can still do that [after April] is anyone’s guess.”
UCLH has a series of high-profile developments in the pipeline that are expected to be finished within 10 years, including a £110m cancer centre, the country’s leading medical research centre, a new heart hospital and a replacement for the Eastman Dental Hospital.
Sir Robert said: “What we are trying to do is gradually trying to acquire as many buildings in our area. Our plan is to knock them all down and build all the next developments.”
Sir Robert insisted the cancer centre, his next building project, would not be affected by the changes in the accounting rules – but the future was not so certain.
He said: “We have a lot of cash, around £140m invested – and none of it is in Iceland.
“The reason we have done so well is we sold the Middlesex Hospital for £175m. If we sold today, I have been told by leading property developers, we wouldn’t get £75m.
“The reality is we made £100m out of the private sector. We can pay for our new cancer centre out of our own money because we don’t have to borrow.
“We will not need to borrow for around four to five years. Only then we will need to because of our long-term developments.
“What will happen then is anyone’s guess.” |
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