Potential "win-win-win" for chancellor on NHS care, economic growth and housing

A new report shows how the health service could unlock billions of pounds of extra funding for NHS buildings and equipment, transforming care for patients, reviving high streets and delivering key worker housing.

Investing in the NHS: Empowering the sector to drive productivity, renewal and growth from NHS Providers and PA Consulting, the global innovation and transformation consultancy, offers a route for renewal and regeneration of the NHS estate with big benefits for economic growth and productivity.

The report says years of underinvestment and challenges around capital spending have left the NHS with facilities that are too often outdated and unfit for purpose.

Coming just weeks before the chancellor’s budget, it offers a series of practical, deliverable solutions for the government that can reverse that trend and boost productivity, providing progress at pace.

The starting point is that improved capital investment is essential to the government’s health goals, modernising care, improving productivity and delivering better outcomes for patients.

It points out that major NHS infrastructure projects typically deliver more than four pounds’ return for every pound put in.

Recommendations include: 
•    Gradually increase the share of health spending on capital to reach 10% of DHSC budget by 2035 from the current 6.5%, raising capital budgets by an estimated £8bn at no overall cost to the taxpayer.
•    Develop a national investment strategy to aid prioritisation and decision making.
•    Deliver on the 10 year health plan’s promise to increase capital freedoms for foundation trusts, encouraging them to make the most of under-utilised assets and allowing them to convert day-to-day funding to capital investment.
•    Working with local authorities to regenerate our high streets and bring NHS services closer to patients.
•    Look at setting up an NHS investment bank so trusts can borrow to access transformational investment without needing private debt.
•    Encourage additional investment through third party agreements for a range of developments including key worker housing, clinical facilities, and retail. 
 
The report argues that because capital budgets only take a small proportion of the overall health and social care budget, a relatively minor rebalancing of capital and day-to-day (revenue) spending would have a dramatic impact on the amount of capital available.

It says with the right cross-government support, all the proposed changes could be delivered by 2035, and many of them before the end of this Parliament.

Launching the report, the chief executive of NHS Providers, Daniel Elkeles, said:
"The case for reform is urgent and compelling.
"Futureproofing the NHS estate is essential if we are to meet the ambitions of the 10 year health plan.
"That means treating capital investment not as an expense, but as a catalyst for improving productivity, stimulating innovation and generating better outcomes for patients.
"It means unlocking progress that is blocked by dysfunctional treasury and government departmental rules.
"There is a really important and helpful message for the chancellor here.
"This is that rarest of things - a win-win-win - offering the prospect of reduced waiting times, increased economic growth and more housing for key workers.  
"Trusts are ready to play their part. We urge the government to match their ambition."

Stephen Farrington-Bell, economics and investment strategy expert at PA Consulting, said:
"The NHS stands at a pivotal moment.
"To deliver for the British people, the NHS needs to become more productive, efficient and effective – and investment is critical to this.
"This paper sets out both the scale of the challenge and the scale of the opportunity, drawing on discussions with NHS trusts and foundation trusts. The exciting part is what can be done when we think of the total power of NHS spending in the round – and how it can be amplified by working with other parts of government and society to really make a difference.
"Critically, we have focused on how this can be done within the current spending constraints set by government – this is not about spending more money, it is about having the freedom to spend money better to benefit patients."