Releasing cash by restructuring multiple lease deals

Client
Royal Berkshire NHS Foundation Trust

Challenge
As with most NHS Trusts, our client is always open to suggestions that can deliver savings. We approached the trust with an opportunity to renegotiate a number of its contracts and deliver reductions in spend. The trust agreed in principle and asked us to review the portfolio to review where savings could be made.

Approach

  • Review of lease portfolio
  • Analysis of market data i.e. RVs, decommissioning costs, return costs, maintenance costs and maintainable lives
  • Proposal issued to procurement and finance
  • In-principle approval received
  • Engagement with all stakeholders to ensure proposal meets ongoing clinical requirements
  • Analysis of ongoing requirements
  • Negotiation of options
  • Presentation of final agreement
  • Analysis of savings
  • Reporting to support CIP
  • Continued ongoing management

Outcomes
We spoke to each of the end users to confirm the life expectancy and reliability of the equipment. Based on that information and the data we hold regarding market values, RVs, decommissioning costs, return costs, maintenance costs and maintainable lives, we negotiated options with the lessors. The project delivered £185k in the first year – which the trust was able to report internally. Over the new lease periods, the project delivered reductions of £1.1m.

“They came to us with a project that had the potential to deliver considerable savings. They worked with all the relevant stakeholders to deliver within the required timescales. The result – a 23% reduction in our annual spend in this category. They provided a range of reporting to support the achievement against CIP target.

Charlotte Hopgood – Portfolio Manager – Royal Berkshire Hospital NHS FT