The NHS is in a critical condition as capital funding pots are being raided to meet a widening funding gap
By 2020, the NHS could be short of 42,000 nurses, charity The Health Foundation warned this week. For the past 11 months, more than 8% of patients have had to wait longer than 18 weeks for non-urgent operations. NHS leaders are now warning that the service faces a funding gap in running costs of around £5bn a year for the next three years, leading to declining quality of care and even longer waiting times.
The funding squeeze on the UK’s health service is well-documented: virtually every day, another story emerges of a personal tragedy caused by over-stretched resources, or a fresh set of statistics which paint an alarming national picture. Labour leader Jeremy Corbyn used the final prime ministers’ questions session last week to attack Theresa May for failing to tackle the dire state of the UK’s hospitals, saying: “She knows there’s a crisis in almost every A&E department.” Whether he will succeed in making the health service a battleground for the upcoming election is far from certain, but the ammunition is clearly there.
What is less documented is the impact wider funding pressures are having on capital investment in the NHS estate. The Department of Health (DoH) has repeatedly raided capital funding pots to plug urgent shortfalls in day to day spending: in 2016-17, a quarter of the health service’s annual £4.8bn budget for capital works was switched to help meet day to day running costs. Faced with a deficit in NHS trusts of £886m over the first nine months of the financial year, a budget that since the coalition came to power has risen by only around 1% a year, overstretched staff, a lack of beds, and rising demand from an expanding population that is living longer, DoH bosses have little alternative but to spend cash meant for buildings on treating patients. But this is desperately short-termist, as even the DoH director general of finance, David Williams, has acknowledged, describing the raids as “not sustainable or desirable”.
The most damaging knock-on effect of the raids is a rising maintenance backlog across the estate. A recent government-commissioned review, carried out by Sir Robert Naylor, put the backlog at £5bn; industry professionals working in the sector believe it could well be higher. Either way, the cuts to capital funds are leading health trusts to prioritise urgent repairs over planned maintenance, storing up even more problems for the future. The health service’s maintenance crisis is moving from treatable to terminal.
Naylor’s review has put forward a host of measures aimed at treating the problem of under-investment in the estate, including a plan to raise up to £5bn for reinvestment in part from selling assets for housing, and investing in primary care facilities that will reduce the burden on hospitals. This will be done through a public private partnership initiative currently known as Project Phoenix.
The measures, which are intended to help deliver 800 primary care units, are a valiant attempt at relieving pressure: industry professionals have welcomed them as a genuine move to tackle long-standing capital spending problems. But they still come with a huge health warning.
The poor condition of hospitals and schools is a result of decades of underspending on maintenance
Even if the plans are a success, which will require unprecedented collaboration from local health trusts to create capital programmes, the money realised from selling off real estate will disproportionately come from prime areas in London and the South. This means the DoH will need to find a way of rebalancing funds to ensure hospitals elsewhere don’t fall by the wayside. And there is still a very real danger that, with new primary health care facilities to pay for, and no sign that the overall funding levels will improve on the scale NHS bosses say is needed, maintenance will keep falling to the back of a long queue for investment.
The Cinderella status of public estate maintenance work is not limited to the health sector. Just last week, the Public Accounts Committee rounded on the government for its “incoherent” approach to schools capital funding, with billions invested in new free schools while existing schools face a repairs backlog of £7bn.
This problem is not new: the poor condition of hospitals and schools is a result of decades of underspending on maintenance. Even governments that have displayed far more public spending largesse than Theresa May’s have often focused on eye-catching, and vote-winning, new schemes at the expense of a coherent programme of repairing and renewing existing buildings.
If those working in construction can help convince politicians at all levels of the merits of planned maintenance spending, and how to use cash for repairs most effectively, the impact would stretch far beyond a few order books. Preventing failing heating systems and leaking roofs might not provide a local MP with an opportunity to cut a ribbon, but not doing so is already costing lives.
Sarah Richardson, editor