The long term plan for the NHS set out a vision for an NHS built around preventative and technologically-enabled models of care. Accompanied by a new revenue funding settlement providing a £20.5bn real terms increase by 2023/24, it described new ways of working to support changes to how care could be delivered, and charted a path towards financial recovery for NHS trusts and foundation trusts.

There needs to be an appropriate capital settlement to support the ambitious vision of the plan. Delivery will require the transformation and upgrade of existing facilities, as well as enhanced digital capabilities and investment in diagnostic equipment. Not only will this help deliver the aspirations of the long term plan, but it will also lead to a more efficient and productive provider sector, offering a better working environment for staff, and in many instances, better services for patients.

However, in recent years there has been a prolonged under-investment in facilities across the English NHS as a whole, which has left too many providers with inadequate buildings, failing equipment and an inability to adopt new technologies to improve care.

A comprehensive spending review is likely to take place in 2020. It represents the best opportunity that has existed or will exist for many years to address this issue. This report is NHS Providers' contribution to the discussion ahead of this vital decision point. We surveyed trusts about the nature and scale of the problem that currently exists, and the impact underinvestment is having on the frontline.

This publication makes the case for why capital matters and how we have campaigned to influence recent policy developments in this area. Informed by trust leaders' experiences, we have sought to identify both the opportunity that an improved capital system presents, and a set of solutions that, taken together, would put the NHS on a more sustainable footing.

Why capital matters 

Capital investment covers spending on assets such as buildings, land and equipment. Investment in facilities is essential to keep any health system safe, and to adapt to meet the changing needs of the population the NHS serves.

Capital spending in the NHS falls within the Department of Health and Social Care's (DHSC) capital departmental expenditure limit (CDEL). This is separate to the NHS revenue budget, which covers for day-to-day running costs such as the pay bill, medicines and consumables.

For accounting purposes, all NHS providers, whether NHS trusts or foundation trusts, are part of the DHSC group. That means that all capital spending by these organisations, whether sourced from trusts’ own cash reserves or from central DHSC funds, scores against the department's CDEL that year.

CDEL is only ever a fraction of the size of the revenue departmental expenditure limit (RDEL) – in 2019/20 the DHSC's CDEL was £7bn – 5.3% of the £132.3bn RDEL. However, despite being a small proportion of overall spending, it provides the facilities and infrastructure that support all healthcare delivery.

Capital spending is vital in several ways:

  • Safety: Poorly maintained facilities put patients and staff at risk. This manifests in a variety of ways. Trusts have reported poorly maintained water supplies leading to legionella outbreaks, unresolved fire risks from unsafe cladding, broken guttering falling from a roof into a public carpark, lifts needed to transfer critically ill patients around a hospital not working, an increased risk of infections breaking out in older hospitals which are harder to clean and mental health facilities which increase the risk of people in crisis harming themselves.
  • Supporting good performance. Trusts need appropriate facilities to be able to treat ever-increasing volumes of patients needing NHS care. They need bed and theatre capacity to keep pace with rising emergency admissions at the same time as meeting demand for elective care, diagnostic equipment such as scanners to enable timely diagnosis and to modernise facilities to ensure care is delivered in appropriate settings, for example in dementia-friendly wards.
  • Efficiency and productivity. Investment in equipment and buildings can enable trusts to adopt more efficient ways of working, that release clinicians' time for more patient facing activities. Such interventions could include new software to make it easier for doctors to capture information, or enable mobile working to support community care. Larger investments could also support internal reconfigurations of services, to co-locate functions that work best in close proximity to one another.
  • Transformation: Trusts are keen to adopt the most up-to-date and best models of care – but moving from the existing way of working to an improved one often requires investment. Consolidating highly specialised services will often involve building works to provide new facilities or repurpose old ones, while a shift to a preventative model may require community facilities to be expanded or modernised. Meanwhile, introducing remote monitoring of patients or e-consultations will require investment in technology.