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The latest NHS estate condition figures will make sobering reading for hospital bosses across England. 

The Estates Return Information Collection (Eric) statistics for 2018/19, which were published last week, show that the NHS collective maintenance backlog has increased to 拢6.5bn. While this figure is less than some experts had feared, the number is still a big jump on the 拢6bn recorded in the previous year. And, confirming the picture of a deteriorating estate, more than half of the backlog is accounted for by maintenance issues that are deemed to pose a 鈥渉igh鈥漮r 鈥渟ignificant鈥� risk. To eradicate 鈥渉igh-risk鈥� problems would cost NHS providers 拢1.1bn, more than twice the level just three years ago.  

鈥淯rgent鈥� repairs or replacements are carried out to prevent 鈥渃atastrophic鈥� failures and 鈥渕ajor disruptions鈥� to clinical services. These failures could in turn result in serious injuries and ultimately prosecutions. The figure for 鈥渟ignificant鈥� maintenance problems, the next grade down, is 拢2.3bn. 

At least 拢4bn a year 鈥� and possibly 拢5bn, given the parlous state of some estates 鈥� is needed for at least seven to 10 years

Conor Ellis, RLB

Helen Buckingham, director of strategy at the Nuffield Trust, a health think tank, says: 鈥淭he split has changed from low and moderate to significant and high.鈥� 

The effect of the backlog can be seen in the 25% increase in the number of clinical service incidents in the past year, according to the Eric statistics. Poor maintenance 鈥� leading to power failures, sewage blockages and risk of fires 鈥� is often to blame for such incidents. 

According to a survey carried out recently by NHS Providers 鈥� the membership organisation for the NHS acute, ambulance, community and mental health services that treat patients and service users in the NHS 鈥� more than 80% of hospital executives believe that continued capital underinvestment is putting patient safety at risk. 

鈥淭here is a clear need to improve facilities across the country,鈥� says Richard Mann, director of the building engineering healthcare practice at Aecom. The main reason for the growing backlog is that while NHS revenue budgets have increased in line with inflation in the past decade, capital budgets did not enjoy the same protection. In addition, capital budgets were raided to prop up revenues. So are the government鈥檚 recent promises of billions of pounds to be spent on the NHS estate a cure for the organisation鈥檚 ills or a short-term, misdirected intervention that won鈥檛 even be sufficient to cover the backlog?

Government promises

The past few months have seen a brace of announcements designed to improve the increasingly threadbare NHS estate. 

In August, one of Boris Johnson鈥檚 first acts when he became prime minister was to unveil a 拢1.8bn boost for NHS building repairs. 

Then as a curtain-raiser for the Conservative Party conference in Manchester last month, health secretary Matt Hancock announced a further 拢2.7bn boost. This will fund the construction of six hospitals and provide 鈥渟eed鈥� money to work up building plans at a further 21 NHS trusts. To promote this spending largesse, Johnson has been pictured on hospital wards nearly as often as an extra from TV drama Casualty in the past two months. 

鈥淚f work needs doing, organisations are happy [to get the money],鈥� says a spokesperson for NHS Providers, adding that while the capital injection is a 鈥渦seful safety valve鈥�, it will take a few years for the new facilities to come on stream. 

Conor Ellis, director of health at consultant Rider Levett Bucknall (RLB), says: 鈥淎fter a decade of austerity in health circles on all fronts capital and revenue, there is now some financial progress. It鈥檚 great that a number of major schemes such as University Hospitals of Leicester NHS Trust, Princess Alexandra Hospital in Harlow and Leeds General Infirmary, are going ahead.鈥�  

Mann says that those trusts, which have secured 鈥渟eed鈥� funding, will be able to start hiring professional teams to work up their plans and develop capital appraisals. 

There are question marks though within the NHS about how the extra cash is being targeted. 

Buckingham says there is no 鈥渋mmediately obvious鈥� relationship between the recently announced projects and the trusts which have the biggest repairs backlogs. 

鈥淲e weren鈥檛 able to see the criteria for choosing,鈥� she says, pointing to the contrast between two London hospitals. 

While the backlog at Epsom and St Helier trust, one of those identified for a new hospital, is 拢34m, the figure for nearby Hillingdon is 拢52m, according to the Eric statistics. 

The NHS Providers spokesperson agrees: 鈥淲e don鈥檛 know how decisions are made and how they are picked.鈥�

Aecom鈥檚 Mann understands why some projects have been given priority, rather than some others that, on the face of it, seem to be more in need. He points to West Hertfordshire Hospitals NHS Trust, which covers Watford, St Albans and Hemel Hempstead, as an example of where work to prepare a business case has been carried out and partners have been lined up to deliver. Those who have done the spade work of preparation, get the rewards.

Mann estimates the latest spending boost could lower the NHS repairs and maintenance backlog by about a third. 鈥淭hese six projects will make a dent but not necessarily a significant dent,鈥� he says. 

NHS Providers, which recently launched a campaign for increased capital health service investment, has called for spending to be doubled over a multi-year period. Ellis agrees that this kind of increase is required. 鈥淎t least 拢4bn a year 鈥� and possibly 拢5bn [compared with the 拢3bn currently spent according to the Health Foundation], given the parlous state of some estates 鈥� is needed for at least seven to 10 years.鈥�

The Conservative Party conference announcement equates to around 拢600m extra a year, well short of the additional 拢2bn that experts and health trusts say is needed. 

Mental health ignored

A particularly glaring gap on Hancock鈥檚 鈥渓ucky list鈥� is that no mental health facilities have been given the green light, even though this was identified as a priority area in the NHS long-term plan, published earlier this year. 

鈥淏adly built mental health facilities will build patient harm into the fabric of the building,鈥� claims one healthcare insider, pointing to the 鈥渕uch closer and more direct鈥� relationship between poorly built facilities and patient harm in this part of the NHS. For example, in well-designed modern mental health facilities, it is much easier to monitor distressed patients than in creaky Victorian former asylums. 

The NHS insider continued: 鈥淭he worst mental health facilities are just not therapeutic environments 鈥� they are restrictive, depressing places that will stop people getting better.鈥�

Another concern for trusts and their construction supply chain is that while short-term injections of cash will always be good news for beleaguered capital budgets, they are no substitute for a long-term investment programme. The six lucky NHS trusts to have been promised new hospitals will have to take the government鈥檚 recent pledge on trust, given that there are no capital commitments beyond the lifetime of the one-year spending review recently announced by chancellor Sajid Javid.

As well as more money, NHS Providers鈥� Rebuilding Our NHS campaign calls for five-year rolling capital spending settlements so that trusts can plan their building programmes. 

鈥淭he NHS will always need a long-term visibility so you can address the backlog and assess what strategic investments are needed,鈥� says the body鈥檚 spokesperson. 

However, any spending increase looks set to come directly from the government. Its Health Infrastructure Plan, which fleshes out the recent funding announcement, confirms that it is government policy to 鈥渞etire鈥� any form of further use of private finance initiative (PFI) for investment in public infrastructure.

鈥淭he days of the big PFI hospitals are gone,鈥� says Nuffield鈥檚 Buckingham.

However, most individual trusts will be unable to stump up the cash from their own resources, says the NHS Providers spokesperson, pointing out that the 拢500m cost of a typical major hospital building project is often equivalent to, if not greater than the annual turnover of the organisations commissioning them. 鈥淭his will need headroom at a national level,鈥� he says. 

The 27-project programme announced by the government is dwarfed by the 100-plus major health schemes procured during the 1990s and 2000s the glory years of PFI. 

Supply chain fears

The ability of the supply chain to gear up for the new spending is another potential headache.  The P22 procurement framework (administrated by the Department of Health for the development and delivery of NHS and social care capital schemes in England) for small to midsized projects has helped to keep contractors such as Bam, Kier and Graham ticking over in the health market. However, the tiny gene pool of tier 1 contractors willing to take on whole hospital projects was further thinned last year by the collapse of Carillion. 

鈥淐learly 拢2.7bn is a substantial sum to be spent,鈥� says RLB鈥檚 Ellis, who thinks the amount of work presents a problem for suppliers, especially in London and neighbouring eastern regions where four of the hospital rebuilding projects are located. 

The silver lining, though, is that a return to more traditional procurement methods may entice contractors who had an unhappy time with PFI back into the health market, says Aecom鈥檚 Mann.

He says: 鈥淎 number of contractors didn鈥檛 have the best experience with PFI so if the government are proceeding with these six projects in the traditional way, it means that contractors will probably come back into the market.鈥� 

鈥淎 number of contractors are now considering their positions having pulled back from the market,鈥� he says, noting Balfour Beatty is in pole position to complete the Midland Metropolitan Hospital project that was abandoned by Carillion when it collapsed last year. 

This is good news not just for the industry but for the public purse as well, says Mann: 鈥淲hen you get just one bidder you don鈥檛 really get value for money for the taxpayer.鈥�