Hospital Parking Charges
Not as Simple as they Look
One intriguing proposal of the Labour Party, a ban on hospital parking charges1, has recently blossomed into a public debate.
A good first question to ask, when any party or politician promises anything, is whether that anything is possible and, if so, whether it would deliver any noticeable benefit. As neither of these questions seem to have been asked so far, I’ve had a look at a couple of cases, in areas I’m familiar with.
The first is the Wye Valley NHS Trust which runs, among other things, the Hereford County Hospital.
At the Hereford County Hospital, the Trust does not directly manage the car parks, or even the contract that covers the running of them, so the parking charges aren’t set by the Trust, nor do they add to hospital finances2. The charges are set by a contractor, Car Parking Plus, the company appointed to operate the car parks on behalf of Mercia Healthcare3 or Sodexo4. The uncertainty is because Mercia Healthcare and Sodexo both work as PFI partners, and though Mercia Healthcare appears to hold the contract, it’s not clear how the work or profits are divided up.
Mercia Healthcare, however, doesn’t exist. There’s a Mercia Healthcare Ltd5, a private company that has taken a mortgage from RBS to buy the PFI contract, and Mercia Healthcare (Holdings) Ltd6, which owns Mercia Healthcare Ltd, through a mortgage from a bank in the Netherlands secured on contracts with Alfred MacAlpine (a building contractor) and, according to the registered charge documents, whichever part of Charterhouse Group, a group of finance companies, is most expedient at the time of asking.
Put simply, the Wye Valley NHS trust is paying one company to pay another company to pay another company to borrow the money to leverage income from a publicly-owned asset in return for financing a construction project and taking on a wider facilities management role, shared or outsourced to a bunch of other companies, including at least four Sodexo subsidiaries. The parking fees and fines amount to an arbitrary bonus on this, and though a slice of it may go to the trust as a form of PR, we can’t tell if it should, or what it is, because all the little Mercias and Sodexos are very private companies protected by rules on commercial confidentiality, and immune from Freedom of Information rules that are sometimes so entangled up themselves it’s impossible for them to know who’s pulling their own strings.
For at least a year, until 15th December 2017, it wasn’t clear who owned Mercia at all. But thanks to a Withdrawal of Person with Significant Control (PSC) Statement7 from Mercia Healthcare (Holdings) Ltd’s their entry at Companies House now helpfully declares that:
Statement ceased to be true on 11/05/2017
The company has not yet completed taking reasonable steps to find out if there is anyone who is a registrable person or a registrable relevant legal entity in relation to the company
At the same time, the company declared that Mercia Healthcare (Holdings) Ltd was the controlling owner, a change that had apparently happened on 6/4/2016, though the Annual Return for 11 January 2016 clearly showed Mercia Healthcare (Holdings) Ltd was already the only shareholder back then.
Mercia Healthcare (Holdings) Ltd has only one shareholder, too. This is Semperian PPP Investment Partners No.2 Limited8, which is owned by and has the same directors as Semperian PPP Investment Partners Limited9, ditto, which is owned by Semperian PPP Investment Partners Group Limited10, ditto, which is owned by Semperian PPP Investment Partners Holdings Limited11, which is registered in Jersey and, at the time of writing, had unsecured funding of nearly £400m due in 2037.
Despite this intriguing complexity, Mercia Healthcare Ltd itself exists only for one purpose, to profit from the PFI contract on acute facilities at Hereford County Hospital, which should make this case one of the easiest to analyse.
However, we still have to guess where the parking charge money is going (we know it’s not going to the NHS Trust, but that’s all we do know), and we can’t see how much that is. This is because PFI contracts are shrouded in an aura of commercial confidentiality that prevent contract holders, assuming anyone can work out who they are, to account. That confidentiality, incidentally, doesn’t just cover financial data. Tricky issues of patient safety can also be swept under the carpet, even if the Trust’s defensive obfuscation doesn’t stall inquirers first12.
Not all parking is outsourced, though, and the Wye Valley NHS Trust maintains control of car parks at its Community Hospitals. In June 2017, and in the face of serious financial difficulty, the Trust decided to impose parking charges at these Community Hospitals13. These charges are lower than those at the County Hospital and differ also in that the revenue goes to directly to the Trust.
So, is a ban on parking charges possible for the Wye Valley NHS Trust? The answer is yes and no. If the attempted ban by the Scottish Parliament14 is any guide, PFI contracts are too difficult or expensive to change to impose a ban on parking facilities run under PFI contracts. So the charges at the County Hospital would probably remain, to the benefit of the PFI partners, while those at the Community Hospitals, could be banned, to the detriment of the NHS Trust. In this case, Labour’s bold proposal looks worryingly like a case of unintended consequences.
Leeds Teaching Hospital NHS Trust (LTHT) is very different, in that none of its car parks seem to be complicated by PFI contracts. Their Annual Accounts15 don’t make clear how much of the £12.5m they make from “car parking, creche fees, access to health records and catering” is derived from parking, the Yorkshire Evening Post16 reported it’s around £1.8m, based on Freedom of Information requests issued by the Press Association. Of that, around £78k is made up of fines. £78k, possibly coincidentally, is what they paid the parking operator, the CitiPark division of Town Centre Securities Plc (TCS), to operate the car parks in the same year.
In TCS’s 2016/7 annual report17CitiPark claimed to make a profit of £610 per parking space per year, and to operate 6400 spaces. Assuming this includes the 1484 LTHT spaces (at 5 sites) listed on Parkopedia, then, all else being equal, this should produce a profit of £900k for the hospital sites. However, LTHT claims to have 5000 car parking spaces, which may be possible if staff parking is operated separately, and could account for the rest of the £1.8m.
A ban would be possible here, though it cost the Trust at least £1.8m.
To be fair, Labour have estimated the costs of a ban at up to £190m18, and hinted that central government would cover these costs, though they haven’t said whether they’d do that out of the existing NHS budget. However, although £190m is a lot of money, but only 0.15% of the NHS budget, and it could be a cost-effective use of public money. If free parking were to encourage visits, and improve staff and patient punctuality, it could measurably improve health outcomes.
At this point, however, we don’t know if it would or not. There’s no conclusive research on the issue and, despite the partial ban in Scotland, no comparative studies appear to have been done. At the personal level, hospital parking charges can be burdensome, but to those who can afford to run cars, it’s unlikely to be a substantial additional expense, and concessionary schemes, based on national guidance, exist for a wide range of users, including staff, long-term visitors and those in receipt of benefits. Given this, alongside the potential legal problems and the unavoidable costs of operating car parks – if only to prevent abuse by non-hospital visitors – the idea of a ban seems more of a crowd-pleasing soundbite than a serious proposal. In short, more research is needed.