While governments since 2010 have helpfully decided the core NHS revenue budget should rise at least in line with inflation every year, capital budgets have been subject to the constraints seen elsewhere in the public sector during the past decade. As a result, the NHS has not seen adequate investment in facilities and infrastructure for many years.
To make the case for this underinvestment to be reversed, NHS Providers launched its #RebuildOurNHS campaign on 29 August 2019. The campaign clearly makes the case for a new deal on capital between government and the NHS to be set out in the next comprehensive spending review.
Why is the campaign needed?
It identified three main problems relating to capital in the NHS:
- First, no capital budget has been set for the NHS beyond 2020/21. As a result, when NHS organisations plan for long-term change they are currently doing so without being sure that the funding for the infrastructure to support those changes will be available.
- Second, current levels of capital spending are insufficient to meet the NHS' needs. Analysis by The Health Foundation demonstrates the proportion of the NHS' budget spent on capital fell from 5% in 2010/11 to 4.2% in 2017/18 – mainly as a result of capital budgets being diverted into revenue to pay for day-to-day running costs. If capital funding had kept pace with growth in revenue funding it would have grown by more than £2bn over the same period – enough to build the equivalent of four new hospitals annually.
- Third, existing mechanisms for individual trusts to access capital funding do not work. There is no match between trusts’ need to replace, update or repair facilities and their ability to do so, as allocation of the capital funding is not based on need. Agreements for major new NHS infrastructure projects effectively ceased in 2015, when the private finance initiative (PFI) regime fell out of favour without an alternative being put in its place. There is also a lack of transparency in how decisions over central allocations are made.
The three asks
At the core of the #RebuildOurNHS campaign are three changes we believe the government needs to make:
- First, set a multiyear NHS capital funding settlement – just as the government has done for the NHS’ revenue budget – allowing the NHS to plan for the long term and transform its services and equipment. Ideally, this would match the ten years of the NHS long term plan.
- Second, commit to bringing the NHS' capital budget into line with comparable economies, allowing the NHS to pay for essential maintenance work while also investing in long-term, transformational capital projects. We should be aiming to at least double the NHS current capital spend and sustain that growth for the foreseeable future. Because the NHS is a universal public service, increasing NHS capital budgets has the added benefit of bringing much needed investment and jobs to parts of the country that would otherwise struggle to attract them.
- Third, establish an efficient and effective mechanism for prioritising, accessing and spending NHS capital based on need, in consultation with those planning and delivering services. This mechanism should ensure trusts are not punished for needing emergency capital funding by the use of interest-bearing loans which they cannot afford to repay.