After years of underinvestment and capital budgets being diverted into revenue, there are too many providers with inadequate buildings, failing equipment and an inability to adopt new technologies to improve care for patients, and provide a modern working environment for staff. COVID-19 has exposed the challenges created by an outdated estate, such as difficultly expanding capacity at pace to adhere with strict IPC measures. These issues will only be rectified with a properly funded and well-designed system of capital funding. This will allow trusts to invest in the buildings and technology that will create a 21st century health service and help them continue to deliver high-quality care to patients and service users. Sufficient capital investment will allow greater strides to be made towards the government’s 'net-zero' and 'levelling up’ ambitions'. Providers will be supported to reach the much higher levels of activity needed to clear the care backlog with substantial investment in extra diagnostic equipment, new technology and new ways of working. NHS leaders will only be able to build the 40 new hospitals announced by government and maintain safe estates with the right capital funding.
The forthcoming comprehensive spending review urgently needs to:
- Set a multiyear NHS capital funding settlement – this would allow the NHS to plan for the long term and transform its services and equipment. While the 2019 health infrastructure plan commits to “indicative multi-year planning envelopes over a rolling five-year period”, to be confirmed annually, the NHS ideally needs at least ten years of indicative budgets
- Commit to a capital budget appropriate for a world-leading health service. The NHS is overdue a capital settlement that will support it in meeting its goals of transforming services, embracing the use of technology, improving access to care, and keeping pace with demographic changes. Sufficient capital investment will also support broader government ambitions to reach ‘net-zero’ by 2050, alongside its 'levelling up' agenda. New analysis from The Health Foundation’s REAL Centre estimates that, in response to growing operational pressures such as the care backlog, the DHSC’s capital budget needs to increase to around £10bn by 2024/25 just to cover core day-to-day spending (The Health Foundation, 2021). Using the DHSC’s 2021/22 capital budget of £8.5bn as a baseline, this suggests a need for yearly real terms funding uplifts reaching £1.5bn by the end of the spending review period. This figure should be seen as an absolute minimum as it does not account for the direct costs of COVID-19, nor the total funding that NHS Providers believes is required for national strategic projects such as new hospitals and hospital upgrades.
- Reform the system for accessing and allocating capital, in consultation with those planning and delivering services. This mechanism must enable all trusts to invest to improve, expand and transform NHS services. The capital system should be based on the principle of subsidiarity and align accountability for services with the ability to make necessary investments.