The cost of new hospitals is set to rise in order to encourage better design.
NHS Estates intends to increase the budget of every hospital (PFI and non-PFI) 12% in response to criticism of the architectural quality of health facilities.

The decision was announced by Stuart Smalley, NHS Estates' head of organisational development, at Building's Blair's Billions conference on Tuesday.

"It is likely there will be a 12% increase in base cost in the not-too-distant future," he said.

NHS Estates intends to ease the financial constraints on builders by raising the public sector comparator – the estimated cost of procuring a hospital using taxpayers' money.

Peter Wearmouth, NHS Estates' acting chief executive, said the decision to raise the comparator was a response to rising consumer expectations and criticism of hospital design.

"We've completely rethought all our cost allowances," he said. "People don't want the cheapest – they want good quality. This gives us more budget and allows designers to be more innovative."

NHS Estates' decision follows a decision by the Department for Education and Employment to increase the comparator for PFI schools 10%. The Lord Chancellor's department is also understood to be considering increasing the comparator for court buildings.

The comparator has long been controversial, with many in the industry claiming it forces bidders to sacrifice quality to demonstrate value for money.

Other speakers at the Blair's Billions conference, held at the Institution of Civil Engineers on Tuesday to discuss the impact of the government's public spending plans, included transport secretary John Spellar, who called on the industry to address its skills crisis and improve its image.

"More must be done to recruit, develop and retain staff," he said. "One of the aims of the industry over the next five years is to improve its attractiveness."