SUMMARY OF REPORT CONTENTS

            Value of UK NHS Expenditure 2008-2015 (£billion)

Under major reforms proposed in the Health and Social Care Act, the NHS is undergoing the most dramatic change in its history, which will see the management of the NHS, including the estate, decentralized as more power is handed to GPs and clinicians. In addition, with NHS capital spending now drastically reduced the process of funding new hospitals and primary care facilities is set to change over the coming years. Responsibility for commissioning services will be devolved to local consortia of GP practices, now to be known as Clinical Commissioning Groups (CCGs). These proposals are being implemented by the Health and Social Care Act, which has recently gained Royal assent. CCGs are now expected to be in place by 1st April 2013 to replace Primary Care Trusts (PCTs).

The Government’s Health & Social Care Bill has been heavily amended in response to industry concerns over the original proposals. However, the broader policies of developing GP-led commissioning and encouraging greater co-operation between private and public care providers remain and, as financial constraints continue and public sector capital becomes more difficult to obtain, the procurement of construction services will increasingly look towards increased partnership with the private sector

These increased powers are expected to form the basis of a new system for procuring healthcare estate facilities, reducing the need for direct capital funding from the public purse. As a result of these reforms, the nature of future work in the healthcare sector is likely to change to reflect a more rationalized estate, with the majority of healthcare clients reviewing their healthcare estates in a bid to achieve efficiency savings.

Industry response to the new Act indicates a move away from secondary healthcare developments such as large PFI hospitals, towards upgrading, refurbishing and extending the primary healthcare estate, with around a quarter of NHS trusts looking to increase the size of their estates through extensions to existing premises over the next 2-3 years. Indeed, the DH has said that in future there will be more emphasis on improving existing premises rather than building new ones.

Going forward, existing methods of delivery of new capital developments, such as PFI, LIFT, Procure 21+ and Express LIFT may change under NHS organisational reforms. As financial constraints continue and public sector capital becomes more difficult to obtain, the procurement system will increasingly look towards solutions with private sector partners.

Those procurement routes and construction programmes specifically included for review in this report include: LIFT and ExpressLIFT; Hub Initiative in Scotland; Procure21/Procure21+; Designed for Life: Building for Wales (P21 in Wales) and Frameworks Scotland.

A total of £2.5bn has been invested across 4 waves of LIFT since its launch, but beyond this time, the DH is unable to set estimates for the amount expected to be spent on LIFT in the future and investment will be subject to change as more schemes are added to the forward pipeline. 

To date, the Procure21 programme has seen 630 schemes completed; totaling around £4bn. Around 50 schemes are currently either on site or under development and worth approximately £680m. Based on the data available from the HM Treasury forward construction pipeline data, which details schemes currently going ahead, the total value of P21+ projects is around £733m to 2015.