Beyond the budget cycle: Why a masterplan is key to breaking free from short-term estate planning

Confronted with an ageing population and escalating maintenance backlog, the challenge facing trust leaders is clear: NHS estates must evolve to meet 21st-century healthcare needs. Yet, estate infrastructure progress is continually stifled by current funding structures and shortfalls, which have left trusts in a frustrating cycle of short-term, reactive decision-making.

This article offers a clear pathway forward. Discover how a strategic estates masterplan provides an anchoring framework for bolder leadership, enabling trusts to break free from existing constraints and unlock the full potential of their estates.

Confronting the limitations of capital funding

A new 10-year health plan for the NHS may still be in the planning stages,¹. Still, as the wait to establish its impacts continues, leaders are left grappling with crumbling NHS estates, significant waiting lists and ongoing recruitment challenges. The staggering £37 billion capital investment shortfall uncovered in Lord Darzi’s 2024 review highlights the scale of the challenge and the pressing need to address the limitations of existing funding structures.²

The current approach to NHS funding of annual in-year CDEL availability has made it increasingly challenging for trusts to commit to large-scale, multi-year capital projects to deliver desperately needed new buildings or major upgrades. Juggling shifting funding allocations from year to year perpetuates uncertainty for trusts. Without the available capital, leaders are often forced to prioritise operational needs and short-term fixes over significant, carefully planned estate improvements — decisions that can significantly hinder the scope and volume of clinical activity that can be delivered.

In an attempt to bolster their balance sheets, trusts are left at the mercy of bidding wars for ad hoc funding injections when capital funds become available. Unfortunately, this piecemeal approach fails to foster strategic or efficient investments of valuable public funds, when too often short-sighted gains are incentivised over enduring value. For example, a successful bid for sustainability funding might appear to be a victory and a positive step towards meeting NHS net-zero ambitions.³ However, its impact is short-term if sustainable technologies, such as solar panels and ground source heat pumps, are fitted to a building nearing the end of its operational lifespan or installed on available land that then stifles future development.

Anyone in a healthcare decision-making role knows that funding is too frequently allocated to siloed projects rather than deployed strategically to solve long-term challenges. How often have temporary, relocatable buildings become permanent features on hospital estates? Provisional solutions that then prevent progress by taking up valuable space, slowing down operational efficiency and creating ongoing maintenance issues that drain valuable resources and budgets.

Trusts have also been at the blunt end of central decisions to withdraw or delay project funds. At least half of the 40 new hospitals pledged under Boris Johnson’s leadership will not be built for many years, with some expected to wait up to 14 more years before work even starts. After years of halting investment in their facilities in the belief that funding would become available for a new project, leaders have been left with unexpected and mounting maintenance bills for infrastructure that either fails to meet the evolving needs of patients or, at worst, is falling into disrepair.

Compounding the burden of decaying infrastructure and delayed projects, the rigid imperative to spend allocated capital within the financial year often forces trusts into making detrimental commercial decisions, such as releasing funds to contractors for projects that ideally need more time, simply to exhaust allocated capital before the financial year ends.

Trust leaders aren’t to blame; they are simply trying to navigate a fundamentally flawed system that doesn’t empower them to realise long-term transformations.

The grounding power of a masterplan

Countering this reactive approach isn’t without its challenges, but real change is possible with the right framework, bold leadership and a strategic understanding of future needs. An estate masterplan is a proven framework that helps trusts overcome reactive, short-term decision-making and unlock lasting, meaningful change.

An estate masterplan should:

• Be a response and solution to strategic long-term clinical planning.
• Provide a holistic overview of critical estate challenges and limitations, including buildings, land, funding and people.
• Enable strategic thinking that maintains focus on long-term outcomes.
• Consider physical and operational matters to provide a considered, deliverable, carefully phased solution.
• Anchor and unite trust leaders around shared ambitions, shifting from reactive to proactive approaches.
• Address the constraints of short-term funding by exploring alternative funding solutions that work within CDEL rules and also support commercial strategies.

Contrary to belief, a masterplan isn’t a blueprint of buildings and spaces; it’s a level beyond that. In addition to meeting evolving clinical needs, trusts face a multitude of unique challenges, whether it’s land-locked estates that limit development or staff recruitment issues and parking/congestion problems caused by poor estate planning. A masterplan helps unlock these complex challenges, devising solutions that consider the whole, not just the parts. With these issues solved, trusts can make way for developments that meet future needs while also addressing operational and financial stumbling blocks.

“Just as critical as creating a masterplan is the collective will to implement it. Trusts that proactively own their masterplans, rather than letting them languish, are the ones who will achieve transformational change and redefine their estates’ future.”

Ian Tuddenham, Development Director, Prime plc

An exploration of possibility

A masterplan empowers leaders to take a step back from the day-to-day operational challenges and consider the “what if?”, confronting what transformational outcomes could be achieved with additional space and capital. This big picture approach helps unravel the puzzle of hospital estates; whether freeing up land through the development of a multi-storey car park or bringing together ancillary services at an off-site location, a masterplan enables exploration of the possible.

The driving force behind a masterplan should always be clinical need. It isn’t just about addressing the immediate requirements but also drawing on demographic data to better understand future healthcare needs and advancements. Yet that doesn’t mean that trusts need to have all the answers, and part of the process is acknowledging what is known as much as what isn’t.

Technology will play a critical role in the types of spaces needed in the future. As innovations rapidly advance, hospitals will face both risks and opportunities. For example, a trust may set aside ample space for equipment, such as proton beam therapy, yet by the time the project is complete, technology may have advanced, and less space may be required. However, advancements in artificial intelligence could offer significant efficiencies within administrative processes, diagnostics and healthcare monitoring that could enable the development of off-site services that free up estate space.

Many of the answers to these evolutions may be unknown at the start of a project, but that shouldn’t discourage action. A masterplan helps leaders to embrace the unknowns while preserving strategic intent and maintaining focus on the overall vision.

Modern, well-designed facilities allow much greater flexibility in physically changing and amending them to react to changes in clinical treatment techniques and the spaces needed to deliver them.

From reactive to remarkable

A masterplan is about giving leaders control of what they can do and providing a strategy that anchors all future decision-making. Yet while it provides a robust framework and guiding principles for the future, it is not so rigid that it cannot flex to unexpected changes or shifting funding parameters.

For example, Prime has worked with estates to devise strategic phasing that enables expansion. One way to achieve this is by developing flexible spaces that are designed and constructed so that they can be changed or adapted to future needs with ease, minimising both disruption and cost. A second solution could be to develop a multi-storey clinical infrastructure project, for example, but only fit out a proportion of that space. Having already financed the main build, trusts can efficiently deploy later funding, including time-sensitive CDEL capital, for the rapid and typically planning-free fit-out of remaining areas.

“Utilising a masterplan isn’t about turning down ad hoc capital funding opportunities, but more a case of readying leaders to capitalise on opportunities as and when they arise and leveraging these funds to their maximum advantage. Something that will put trusts in an advantageous position when the NHS 10-year plan is finally unveiled.”

Guy Kippen, Associate Development Director, Prime plc

Embracing alternative solutions to achieve progress

In our previously published insights article, Strengthening the NHS, not selling it out, we acknowledge the increasing need for hospital trusts to utilise institutional investment to realise their infrastructure ambitions. From large, shared NHS/private patient units and multi-storey car parks to staff accommodation and retail opportunities, Prime has devised sustainable financing solutions that deliver transformations to NHS estates without compromising the values that underpin our healthcare service.

Trusts like Yeovil District Hospital, University Hospital Southampton and Dorset County Hospital have all reaped the benefits of a long-term approach and innovative financing solutions on their estates. By blending public and private investment and offering flexibility in capital and revenue streams that can accommodate varying project timelines and funding availability, trusts can deliver progress that would have otherwise been unobtainable under the limitations of rigid annual budget parameters.

“In the current political and economic climate, there are three critical elements that set trusts with successful transformations of hospital estates apart from their peers: 1) remaining committed to a long-term perspective, 2) being braver and bolder in planning and decision-making, and 3) a willingness to leverage external expertise and innovations.”

Ewan Forsyth, Development Director, Prime plc

There is no doubt that the future will remain challenging for health and care leaders, and it takes a brave trust to resist the temptation to grab hold of every funding opportunity that comes their way. However, lasting and meaningful progress that brings healthcare infrastructure into the 21st century can only be achieved when decision-making is grounded by a strategic approach that prioritises long-term ambitions over fast fixes.

With costs only set to keep increasing and financial pressures intensifying, the price of shortsightedness will become increasingly unsustainable. The strategic lens of a masterplan is no longer a nice-to-have option — it’s becoming the only viable route to a future that can deliver the best possible outcomes for patients.

To see the outcomes of Prime’s successful approach to masterplanning, take a deeper look at the following case studies:

• Yeovil District Hospital Partnership and Masterplan
• Dorset County Hospital Masterplanning
• University Hospital Southampton Partnership and Masterplanning

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^{[1] Creating a new 10-Year Health Plan, NHS}

^{[2] The Darzi investigation: what you need to know, NHS Confederation}

^{[3] £100 million funding from Great British Energy for NHS trusts to install solar panels and battery storage systems, NHS}