Releasing £163k in savings by enforcing lease contract terms following audit

Client

North West Anglia NHS Foundation Trust

The challenge

  • Hinchingbrooke Healthcare NHS Trust retained us to manage their leases between 2001 and 2010, during which time we procured 34 leases– all with the maximum rentals capped.
  • In 2010, they terminated the retainer contract as they were to be managed by Circle Health.
  • In 2017, Hinchingbrooke merged with Peterborough and Stamford Hospitals NHS Foundation Trust to become North West Anglia NHS Foundation Trust.
  • The Assistant Director of Procurement at Peterborough, already a leasing client, instructed us to complete an audit of Hinchingbrooke’s leases.

Approach

  • As part of the audit, we contacted all the lessors, gathering lease data and then populating that data onto our lease management system, OPTIMiSe.
  • This allowed us to have instant visibility of the portfolio and review all costs paid and due.
  • We identified the lessor had overcharged them quite significantly on a number of leases – by £163,000; the trust had paid the rentals despite them being in excess of the contractual terms
  • We instructed the lessor to immediately stop issuing any further rentals on the leases in question
  • We had several very detailed conversations with the lessor regarding the terms of the leases, and the capped maximum rentals due, escalating this to senior management at the lessor

Outcomes

  • Complete overview of the portfolio under management following the audit and access to the system
  • A full refund of £163,000 was agreed with the lessor, despite the rentals having already been paid
  • Ability to continue all these leases at zero rentals, until they are no longer required
  • Assurance that all other leases in the portfolio will be effectively managed going forward and excess costs not incurred.

“Lifecycle prove their value for money time and time again – this is one of many examples. We’d overpaid compared to the Cap and wouldn’t have identified that had we not engaged with them again. Lifecycle didn’t just identify and stop any further overpayment, they also worked with the lessor involved and negotiated a refund for the overpaid amounts in full. Thank you Lifecycle, – we do like a good news story!”

Steve Davis
Asst Director – Procurement
North West Anglia NHS Foundation Trust