Peterborough District Hospital Land Sale Preferred Bidder Found

08:07 Wednesday 13th June 2012
Peterborough Breakfast Show
BBC Radio Cambridgeshire

ANDY GALL: It’s taken eighteen months, but finally a bidder has been found for the former Peterborough District Hospital site. Since the new hospital opened, the old site in Thorpe Road has been empty, but now the London-based Lands Improvement Holdings are currently in negotiations with the Trust. Last month we heard how the new hospital was left with a budget shortfall of over £54 million, and was struggling to find money to continue operating. Earlier, Peterborough’s MP Stewart Jackson welcomed the news. (TAPE)
STEWART JACKSON: I’m delighted, belatedly, that this project seems to be going ahead, given that, as you quite rightly say, the old Peterborough District Hospital has been empty, and the site vacated, since November 2010. You’d think with that kind of debt hanging round their necks they would have wanted to realise their capital asset as soon as possible. (LIVE)
ANDY GALL: He went on to say that Peterborough is in urgent need of housing, but residents want the right mixture of housing, and the infrastructure to support the project. (TAPE)
STEWART JACKSON: Well they want a mixture of prestigious high-end homes, and they also want more modest shared-equity housing. They don’t want lots of social rented flats near the station. They want the transport infrastructure looked at. (LIVE)
ANDY GALL: Nigel Hards is the Chairman of the Hospital Trust, and we can speak to him now. Good morning Nigel.
NIGEL HARDS: Morning Andy.
ANDY GALL: Why such a delay in getting to this point?
NIGEL HARDS: There hasn’t actually been any delay. We had an approach about a year and a half ago, as the MP suggested. And we looked at that approach, and the Board decided that it wasn’t the best way of getting the maximum yield from the land. And also, it’s fair to say and must be said, the site has not been vacated since November last year. Part of the site has been vacated since November last year, and in fact some parts of the site are still occupied now.
ANDY GALL: So therefore do you think that was part of the complication of finding a bidder, that there was still some confusion over the use of the site?
NIGEL HARDS: No not at all. The complication is the complication that every company in the country is facing at the moment, and that is that land values are not where there were, and the number of companies that have balance sheets that are strong enough to take on a commitment of this size in the building industry and in the land industry are very few.
ANDY GALL: Well apparently the previous bid was £20 million.
NIGEL HARDS: I’m not going to comment on previous numbers. I don’t recognise the number, but ..
ANDY GALL: OK. Can you tell us what you think the true value of the site is?
NIGEL HARDS: I can’t. No. Because it’s commercially sensitive at the moment. All we have done at the moment is from those who showed an interest in the land, chosen a preferred bidder. And as anybody in a negotiation would do, you won’t show your hand.
ANDY GALL: So OK. Why have Lands Improvement Holdings become the preferred bidder? Can you tell us that?
NIGEL HARDS: For reasons I’ve just described. They have a track record of being able to afford a transaction of this size. They have been selected out of all the people who showed an interest, using professional agents from London. The Board had a presentation from the agents of those who had shown an interest, and the Board viewed that this was our best chance of maximising the yield from that land.
ANDY GALL: What do we know about Lands Improvement Holdings?
NIGEL HARDS: Personally, as somebody who is the Chairman of the Hospital and spends his life in financial services and the travel industry, not a lot. But our agents have examined them in a great deal of detail, and tell us that this is the best that we’ve got on the table. But it is the Board’s responsibility, and single responsibility, to maximise the yield from that land, so it can be reinvested in health care.
ANDY GALL: You say maximise the yield from the land. How vital was it that you did have a bidder come forward and get to this stage now, because .. ?
NIGEL HARDS: It’s important. It would be very easy, as Stewart Jackson described, to take the view that we need to get cash into our systems. But these are two separate issues for me. The receipts from capital assets being sold should be reinvested into the business to strengthen the business, not to if you like put right a current account deficit.
ANDY GALL: Well that’s interesting, because I was going to ask about that Nigel. Because you’re left with a budget shortfall of £54 million. So I wondered whether that was going to .. if you talk about it on personal perspectives .. if you find you get yourself get some money, it’s always a bit frustrating to put it into paying off your credit cards.
NIGEL HARDS: Well that would be a matter for us and our regulator and the Government of course. But in theory what the Board would always want to do, if it’s selling assets, is to put that money into new assets that will increase and improve the business.
ANDY GALL: Can you give us an idea what that might be?
NIGEL HARDS: Well we might for example want to invest in our radiotherapy department, which is absolutely working to capacity, and the demand is greater than the capacity we have. So to buy new radiotherapy equipment, or to extend the facility already, might be one of the places where the Board wants to try and reinvest some of this funds. So it’s not just a case of paying down debt. What we’ve got to do is to get the day to day running of this business to cover itself, and when we get these funds from the sale of the land, be in a position to reinvest it in the business.
ANDY GALL: Nigel, I don’t know anybody, and I’m sure many people don’t know what it’s like to manage a hospital, but what is the incentive to get down the debt? What happens if you don’t get down the debt?
NIGEL HARDS: The incentive to get down the debt is to prove to everybody that we have an efficient facility, not only a world-class building, but we have an efficient facility in terms of how everybody is treated, and everybody wants to back us. And in a new world where commissioners can choose where they send their patients, we want them to choose to send them here.
ANDY GALL: What responsibility do you have to the site itself, and to the future of the site? Because obviously if somebody comes forward with a big cheque, your eyes will bulge at that. But you still have some kind of social and ethical responsibility to that location.
NIGEL HARDS: Well the Board itself doesn’t have any stated responsibility. Our responsibility is purely and simply to get the maximum yield from that land. But our being socially responsible people on the Board, we would like to see the city enhanced. So as a main arterial road into the city, we would like it to look right. But that is a matter for the planners and for the City Council, not for the Hospital Board.
ANDY GALL: OK Nigel. Thank you very much for talking to us this morning.
NIGEL HARDS: My pleasure.
ANDY GALL: Nigel Hards, Chairman of the Hospital Trust.