The Government’s New Hospital Program (NHP) has identified just four main contractors who would take on projects worth £600m or more, a report has revealed.
An investigation by the National Audit Office (NAO) into plans to deliver 40 new hospitals by 2030 says the plan has not been good value for money so far and will only deliver 32 new facilities for the expected date.
In a report published today (July 17), the public spending watchdog says program bosses appreciate the importance construction companies play in its delivery. However, he says: “The UK has a number of major infrastructure projects underway and NHP has identified only four main contractors who would consider building a large, complex new hospital (valued at over £600m) .
“Contractors may have a choice about the schemes they undertake in the second half of the 2020s, given the high demand for their capacity.”
The NAO warns that costs could rise if the NHP tries to build too many facilities at once, and recommended that the program avoid bundling building schemes.
The report does not indicate which contractors have engaged with the department in this regard. Last year, Construction news reported that the program planned to appoint 20 contractors for its first-generation alliance framework.
Bam Construct, MTX Contracts along with larger specialists and a partnership between Willmott Dixon and Mace were among those said to be looking to win work on the show.
The watchdog’s report also highlights that a standardized modular approach planned for the programme, called Hospital 2.0, has been assessed to deliver £4.80 of benefit for every £1 of cost. It has also been assessed to be cheaper in 15 of the 23 schemes assessed than the hospital trusts’ own plans.
However, the watchdog notes that project bosses have assumed there will be a reduction in treatment within hospitals in the coming years, with people increasingly being looked after through social care. Although this is an aim of NHS England and the Department of Health and Social Care, this measure has not yet been funded and is not guaranteed to happen.
Program leaders have also assumed that hospitals will need fewer beds in the future with patients experiencing shorter stays under their plans, which the NAO describes as “poorly supported by the evidence”.
The NAO said these assumptions may bias the cost-benefit analyzes that have been carried out, adding that the new hospital design may be too small for what is required. He told the program to reconsider its facilities plan under Hospital 2.0.
NAO chief Gareth Davies said: “The program has innovative plans to standardize hospital construction, delivering efficiencies and quality improvements. However, under the definition used by the government in 2020, it will now deliver 32 hospitals new instead of 40 by 2030.
“So far, delivery has been slower than expected, both on individual schemes and in the development of the Hospital 2.0 workforce, which has delayed program funding decisions.”
A spokesman for the Department of Health and Social Care insisted that 40 new hospitals will be delivered by 2030.
“We remain strongly committed to delivering these hospitals, which are now expected to be supported by more than £20 billion of investment, helping to reduce waiting lists so people can get the treatment they need faster. Three new hospitals have already opened and more will open this year so that patients and staff can benefit from the large new hospital buildings, equipped with the latest technology,” they added.
Response from NHS Chief Executive of Providers, Julian Hartley
“Keeping patients and staff safe is central to everything the NHS does. High-quality patient care requires safe, efficient and reliable buildings and equipment.
“He will be concerned that the NAO has found that the government’s new hospital program has not achieved good value for money so far.
“We agree with the NAO that delivery has been slower than expected. The costs of delayed NHP schemes have increased due to high inflation. Many NHP trusts are deeply disappointed that their plans to construction will not be delivered before 2030 and many more trusts were disappointed not to be offered any funding.
“The government could have better managed expectations about available funding, given the uncertainty that comes with it and the impact of inflation.
“The government needs to future-proof new hospitals and care environments, and heed the NAO’s warning that hospitals may be too small, given high levels of bed occupancy. We need to get it right The government has also made ambitious assumptions about the scale of care that will be provided in community settings in the future.
“The government needs to shift gears and increase capital investment to overhaul older NHS properties. Many mental health, acute, community and ambulance services lack money for the critical capital projects needed to deliver modern, therapeutic care , and too many NHS buildings and facilities are falling apart.
“The crushing cost of trying to fix creaking infrastructure and outdated facilities is rising, with a £10bn repair bill across the NHS growing at an alarming rate.”
