Hospital capital investment in the NHS is more important now than ever. Rundown buildings and the spiralling maintenance backlog, which is currently over £10bn, are putting patients at risk and stymying elective care recovery.
It has been well documented by a range of sources, including recent analysis by the HSJ, Financial Times, and Health Foundation, that the one of the core underlying problems facing the NHS is historic underinvestment in capital. This is evidenced by the current capital stock per worker being half that of most comparable health systems.
In the past weeks, much has been said about this ongoing infrastructure crisis. One element in particular which has demanded much media attention is the government’s New Hospitals Programme (NHP). This programme was responsible for delivering 40 new hospitals and rebuilds by 2030, described by the government ‘as the biggest hospital building programme in a generation’.
When the programme was launched in 2020, it was largely welcomed, notwithstanding the controversy around the definition and use of the word “new”. It seemed that after many years the need for a long-term capital investment strategy within the health service was being taken seriously. However, since then, progress with the programme has been slow.
Last week, the National Audit Office published a report analysing the problems faced by the NHP, principally whether the schemes could be delivered to time and to budget.
Whilst £20bn for the NHP had been committed, this is around £10bn less than what estimates require, many schemes due for completion by 2030 have been pushed back, and recently more than 120 bids from other providers for future schemes were rejected. The NAO report concluded that by the definition the government used in 2020, it will not now deliver 40 new hospitals by 2030.
The focus in this debate should not be on whether manifesto commitments have been delivered in the guise in which they were promised, but rather is there a serious, credible, and achievable plan for delivering new hospital infrastructure, which is fit for purpose, future-proofed, and clinically driven?
The answer to that question is currently unclear. From our engagement with hospital providers across the country, one of the underlying issues remains the same – accessing capital remains difficult and the business case sign-off process for capital investment is opaque, elongated, and inconsistent.
However, there is good news. Across a range of schemes, we have had recent success with NHS providers in delivering major capital projects, whether it be under the umbrella of the New Hospitals Programme or in the context of Elective Care Recovery.
For example, Akeso supported a major Trust in the North West successfully deliver an NHP-associated scheme through the Outline Business Case and Full Business Case process and in doing so managed to secure an additional £11m in funding on the original capital allowance. Building works are currently underway and the scheme is set to completed at the end of 2024.
Reflecting on the success of this project, Akeso have defined the following factors as being key for successful infrastructure projects and capital business cases:
- Engage with regulators from day one and don’t stop – continual engagement with the relevant regulator is essential for the delivery of successful capital investment and infrastructure projects. The requirements of a HM-treasury compliant business case for a capital scheme can appear vast and complicated, however engagement with the regulator will clarify critical areas of focus for the project.
- Balance the local with the national – it was announced that the NHP had been paused to explore means of standardisation from the centre, including the potential mandated use of standard layouts and repeatable rooms. Whilst efficiencies within the hospital building programme should be welcomed and encouraged, this should not negate the imperative for locally shaped hospital solutions. All hospital planning should be based on locally designed clinical models and services, in line with ICS planning and population health management.
- Clinical model first, infrastructure design second – the first key milestone for the project should be the development of the right clinical model. Following agreement of this, a range of capital options should be scoped to deliver this model.
- Don’t let the perfect be the enemy of the good – simply, the current biggest blocker to the NHP and wider infrastructure transformation is affordability. In the business case process, an options appraisal should evaluate all options available, particularly those which deliver the greatest degree of benefit. However, in the case of some schemes, a capital envelop has been committed. Where this is the case, the project should continue to explore all options available, but always ensure an option for the allocated value has been developed and not over stretched.
If you want to understand more about developing successful business cases or how to shape an infrastructure and estates strategy, please get in contact with Peter Marshall.