Most tenants of NHS Property Services do not have tenancy agreements whilst many dispute the rents they charge, according to a highly critical parliamentary report.

MPs, publishing their report yesterday, said the organisation was set up “to fail” and called for urgent action to overhaul NHS property management. The agency is responsible for many practice premises but its charges are frequently disputed, leading to it holding more than half a billion pounds of debt on an estate worth £3.5 billion, according to the Public Accounts Committee of the House of Commons.

The committee found that a further £100 million had been written off as unrecoverable. MPs said Department of Health officials were so anxious to ensure that services were not interrupted, they had failed to “get a grip” on the problem for six years and had “failed miserably”.

They found that the agency had 2,400 different facilities management arrangements and had no access to conventional landlord powers to manage tenants. Some 70% of tenants did not have leases.

Committee chair Meg Hillier said: “NHS Property Services was gifted valuable local assets when the NHS was reorganised. It can neither make its own decisions about the future of these public assets but not does it always engage well with local stakeholders.

“It lacks the powers to run its £3.8 billion portfolio of properties, effectively. It is unacceptable that the majority its tenants, including health centres and GP surgeries, have not signed rental agreements.

“In turn, the lack of rental agreements has led to disputes by NHS organisations and GPs over the accuracy of their bills. This has resulted in nearly £700 million either still unpaid or written off. Pursuing and resolving these disputes is a waste of NHS resources which would be much better focused on delivering better patient services.”