• In September 2021, the government announced that the NHS in England would be given an extra £500m capital funding over the next six months for increased theatre capacity and technology, to support elective recovery. Other investments made over the past 18 months demonstrate a welcome acknowledgement from ministers that NHS facilities need investment.

  • In response to our recent survey, finance directors highlighted the positive impact that a properly funded and well-designed system of capital funding can have, such as:
    • more integrated care, for example one trust built a new primary care centre on site
    • greatly improved service access and patient experience
    • reduced infection prevention and control (IPC) risks
    • improved efficiency and productivity, which helps tackle growing waiting lists
    • accelerated digital transformation.

  • On top of this, sufficient capital investment has the potential to support the government’s ‘levelling up’ agenda and the NHS’s ambition to become ‘net zero’ by 2040.

  • However, it is evident that the current capital system presents a number of barriers to realising these benefits. The majority of finance directors told us that they have insufficient access to capital and need more freedom over capital spending to meet the needs of patients:
    • 78% of trusts felt "very unconfident" or "unconfident" that they would have access to sufficient capital funding to transform in line with the ambitions of the NHS long term plan
    • 67% of trusts felt "very unconfident" or "unconfident" that they would have access to sufficient capital funding to address their total maintenance backlog.
    • 67% of trusts felt "very unconfident" or "unconfident" that they would have access to sufficient capital funding to transform as part of the journey to digital maturity.
    • 67% of trusts "agreed" or "strongly agreed" that they had funds to invest in capital projects, but national/system capital limits restricted their ability to do so.

  • To protect patient care, support recovery from the pandemic and ensure staff work in safe environments, the forthcoming comprehensive spending review (CSR) must therefore address the following points:
    • first, the NHS needs a multiyear capital settlement and ideally at least 10 years of indicative budgets
    • second, the NHS needs a capital budget appropriate for a world-leading health service – estimates suggest an additional funding requirement of £1.5bn by 2024/25, although this figure should be seen as an absolute minimum
    • third, the system for accessing and allocating capital should be reformed in consultation with those planning and delivering services. Wherever possible, capital spending decisions should be devolved to the level where service accountability sits.