In a report published on Friday the Auditor General for Wales, Sir John Bourn, said NHS-owned property had not been sold quickly enough - sometimes resulting in missed financial opportunities.

A number of offers were received, considered and rejected by the health authority between early 1996 and late 1998

Auditor's report

The case of the sale of the former psychiatric hospital at Denbigh in north Wales which ended up costing the taxpayer £300,000 is highlighted.

He also identified £30m-worth of under-used and unsuitable hospital premises could be sold to raise much needed funds for the cash-stricken health service.

Sir John said the average costs involved in selling unwanted NHS properties in Wales was 14% higher than in England.

Investigations showed it took around 21 months to sell an NHS-owned site in Wales - seven months longer than the English average of 14 months.

The report said improvements had to be made to the way the health service handled the disposal of buildings.

The Denbigh hospital sale was used as an example of how the disposal of property by the NHS in Wales had resulted in costs exceeding the total proceeds.

Delay costs

Sir John said there was scope to identify more surplus property for sale in Wales, but he warned that sales should be speeded up to save money.

The report recognised the different market and property conditions in Wales compared to England.

But it said the delay in selling properties had cost the health service dearly.

"If NHS trusts and health authorities had halved the overall time taken in 1999-2000 and 2000-01, they could have saved the NHS in Wales some £1m in related disposal costs," Sir John stated.

Listed building

In the case of the Denbighshire hospital, officials initially refused offers in the region of £1m.

Following years of delay the listed site was eventually sold for £155,000 in 1999.

The hospital in Denbigh was built in the 1840s but was found to be surplus to requirements in the mid 1980s.

Consultation took place in 1991 and, after a period of winding down, the site closed in October 1995.

The report said: "A number of offers were received, considered and rejected by the health authority between early 1996 and late 1998.

"For various reasons the health authority decided not to accept these bids, some of which were offers of around £1m."

The sale was investigated by the district auditor who reported his findings and the lessons to be learned to the health authority and the Welsh Assembly in February 2000.