Six-year job to drive government’s pledge to build dozens of new hospitals to be put to market next year
The government’s New Hospital Programme (NHP) is looking to appoint a lead consultant for a six-year job worth up to £600m, Building can reveal.
A programme delivery partner (PDP) will be hired to drive forward at least 28 major hospital schemes under the £20bn reboot of Boris Johnson’s 2020 pledge to build 40 new hospitals by 2030.
The job is anticipated to run from the 2024/25 financial year up to 2030/31, with the possibility of an extension of up to four years to 2034/35 if the appointed consultant team is deemed to have performed well.
In a market update briefing sent to interested suppliers, leaders of the programme said the estimated £500m to £600m value for the initial six-year contract is yet to be approved by the government.
But the update, seen by Building, said the delivery partner would be “critical” to building and developing the infrastructure, systems and processes needed to embrace the NHP’s “transformative vision” for hospital construction.
In May, the government announced it was relaunching the NHP with a new modular design approach dubbed ‘Hospital 2.0’ that will see at least 14 hospitals built using modern methods of construction and standardised materials.
It is hoped that the approach will result in schemes being completed 25% faster and at a lower cost.
Previous supplier updates have stated the need to build up a “national industry” for the standardised components, which the PDP, expected to be a consortium of project manager firms, will play a key role in orchestrating.
This week, the NHP said the appointed team will need around 300 to 400 staff in the first four years of the contract, with this number then tapering down as expertise is absorbed into an overarching NHP team.
“NHP will begin as a thin client, with more capabilities fulfilled by the PDP. Over time, the PDP will transfer knowledge and capability to the NHP, enabling an increasingly mature client function and a more equal blend of in-house out-sourced resource,” the NHP said in the latest update.
It is envisaged that the PDP will be a “flexible arrangement” with a scope of services that is both “deep”, providing leadership, managerial and operational functions and “broad”, encompassing a wide range of disciplines and skills.
A total of 45 hospitals are now included in the programme, including two, the Royal Liverpool Hospital and the Northern Centre for Cancer Care, that have been completed, and five newly added hospitals which have been found to contain unsafe reinforced autoclaved aerated concrete (RAAC) which will be completed before 2030.
But the update said the NHP is being seen as a “rolling programme of capital investment” in hospital infrastructure that will consider adding further schemes beyond 2030.
The document also set out a series of failings in previous projects, including “insufficient appetite” on the part of contractors for hospital schemes due to their “complexity and risk profile”.
“Supplier volatility and market saturation have been common issues which have led to cost increases.
“Our approach provides a pipeline of projects to encourage up-front supplier investments and supports a timely delivery of NHP Schemes by developing the manufacturing capacity nationally, to ensure suppliers are available when needed,” the update said.
The NHP also blamed a lack of integration between construction and operational teams and “inconsistent” collaboration between NHS trusts and project team partners for leading to “siloed” work on projects.
“We are therefore standardising the design approach to produce repeatable designs that streamline processes, lower costs, and reflect current best practices.”
The PDP will be incentivised by an opportunity to increase profit margins based on good performance metrics, with “enduring underperformance” to result in margins being put “at risk”.