Recommendation 2

The lack of rental agreements in place undermines NHS Property Services’ ability to manage its estate effectively and drive maximum value either in income or in public benefit. In April 2019, six years after NHS Property Services began operating, only 30% of its tenants had rental agreements in place. It has no effective way of getting tenants to sign formal rental agreements and is retrospectively trying to agree leases with occupiers already in situ. It has sought to get more agreements in place by simplifying them and by issuing 3,500 non-binding summaries of the main features of the lease arrangements, but this has not worked. Rental agreements need to be based on a common understanding between the tenants and landlord about what is being rented and how much it costs. The data that NHS Property Services holds on its properties and tenants has improved but is liable to degradation if tenants do not inform it of changes to the space they use. NHS Property Services recognises that it needs to continue to improve the accuracy of its data, but without effective powers of enforcement, it needs national bodies to do more to ensure that tenants engage, agree the supporting data and sign rental agreements. NHS Property Services is working with the national bodies—the Department and NHS England and NHS Improvement—to agree a joint plan to get rental agreements in place for all its tenants but could not provide us with a clear timetable for this. Recommendation: Within two months the Department should set out a clear timetable for NHS Property Services to agree tenancy details with all tenants by July 2020. This will require: • proper transparency between NHS Property Services and tenants on the basis for all proposed charges; • national bodies to ensure that tenants fully engage with the process to agree tenancy arrangements; 6 NHS Property Services • an agreement from national bodies of any funding arrangements required to meet agreed obligations; • an agreed process for making changes to tenancy arrangements and billing.