Why NHS trusts and Integrated Care Systems (ICSs) must embrace alternative solutions and a bold approach to avoid the spiralling costs of delay and build facilities fit for 21st-century healthcare.
In 2019, Prime’s seminal thought leadership report, Ending Change Paralysis, sounded the alarm on the cost of inaction on NHS estates. It highlighted a staggering reality: that a three-year delay increases costs on a healthcare infrastructure project by more than 40%.
Since this report was produced, the world has been subject to even more volatility, with the flames of uncertainty fanned by a global pandemic, an economic crisis and escalating geopolitics and climate concerns.
Stifled by factors outside their control, the chorus of frustration from healthcare leaders is growing louder. At Prime we understand leaders’ desperation to break free from the cycle of short-term fixes that are preventing long-term infrastructure investments.
In response, our latest thinking in this interactive report explores the challenges, highlights a path forward and showcases progress in action within the UK.
01 A perfect storm
An ageing and growing population with increasingly complex healthcare needs puts immense pressure on strained healthcare resources and deteriorating infrastructure. To keep pace with these evolving demands, NHS trusts and GPs need flexible, fit-for-purpose healthcare infrastructure – for both patients and workforces.
Unfortunately, the ability of trusts and ICSs to deliver estate transformations has never been more challenging. A series of factors have restricted progress and continue to complicate the NHS estates landscape.
500%
The NHS maintenance backlog has more than doubled over the past decade, with the ‘high-risk’ backlog rising by 500%. 1
One in five
people in England is waiting for hospital care, and 14% have been waiting for more than a year. 3
The rising cost of building new infrastructure:
March 2020 – March 2024 4
02 Deepening deficits
An in-depth study by the Institute for Fiscal Studies has estimated the amount of investment required to eradicate the NHS England maintenance backlog has more than doubled from £5.5 billion in 2013-14 to £12.5 billion in 2022-23 (2024-2025 prices). 5
As costs rise and bureaucratic hurdles become more complex and time-consuming, so do the risks. CDEL funding rules have constrained NHS capital budgets. The impacts of this have been further compounded with systems combining CDEL allocations that require system prioritisation of capital projects. Many of these systems are still in their infancy and lack clear agreements on those priorities, and, as a result, a cohesive estates strategy remains elusive for many trusts and systems. In addition, once viable projects may no longer be affordable once planning and funding approvals have been achieved. As a result, trusts find themselves having to value engineer and alter the provision of services that can be delivered.
Prime’s research has uncovered that a four-year delay between 2019 and 2023 added 44% to a project’s total cost. Today, a ten-year delay in getting spades in the ground would increase these costs by 140% – often insurmountable increases that put trusts in perilous positions.
Future delays could create even more significant cost increases:
03 Delay impacts more than budgets
The inability to maintain the state of NHS equipment and buildings creates severe operational challenges and can be detrimental to patient safety, wellbeing and staff satisfaction.
Broken lifts, leaking roofs and structural safety risks, such as those caused by reinforced autoclaved aerated concrete (RAAC), 6 are some of the harsh realities of deteriorating infrastructure facing NHS patients and staff. Entirely avoidable impacts with long-term capital programmes that provide proper lifecycle repairs, preventative maintenance and replacement programmes.
As well as forcing unit closures, creating overcrowding in wards and contributing to NHS backlogs, these challenges are piling pressure on trust leadership teams who find themselves diverted from long-term planning towards fire-fighting day-to-day operational emergencies.
Challenging working conditions, poor staff facilities and a lack of keyworker accommodation also contribute to critical recruitment and retention challenges in the NHS. In the wake of the COVID-19 pandemic, these issues are driving healthcare staff out of the profession in search of improved working conditions and better remuneration. Today, the NHS is facing staff shortages of 121,000 (FTE), with only one-quarter of the workforce stating that there are enough staff at their organisation. 7
Patient care is impacted without adequate staffing, forcing trusts to increase their reliance on agency staffing and divert vital funds away from essential infrastructure projects. Deteriorating infrastructure has created this vicious cycle that many trusts are struggling to escape from. While the NHS Long Term Workforce Plan aims to grow workforce numbers in the next six years, the infrastructure needs to be in place to support these staff as they enter the workforce, undertake their training and take permanent positions; a reality that does not exist for most trusts today.
04 Freedom from short-termism
Prime knows that health and care providers are more acutely aware of their estate’s challenges and are more motivated than anyone to solve them. Yet, within this complex fiscal and operational healthcare landscape, what is often out of their grasp is a viable path forward.
For too long, intricate and interconnected issues have hindered progress on NHS estates. However, transformation is possible for trusts that anchor their strategy to a compelling estates masterplan.
01 Play the long game
An estates masterplan is a strategic tool enabling trusts to outline their vision for the future of their healthcare estates. By assessing the current state of facilities and establishing future needs, trusts can align development priorities with clinical needs, regional healthcare plans and direction of long-term service delivery. Fundamentally, a masterplan acts as a roadmap for trusts, driving decision-making and ensuring the estate and facilities are fit for purpose and can flex to meet the evolving needs of patients and staff while also being financially sustainable.
While an estates masterplan doesn’t guarantee the availability of finance to achieve the vision, it equips trusts to prioritise effectively. This allows them to seize opportunities when funding becomes available, whether due to shifting accounting rules, a newly elected government or evolving investment regulations. Empowered with clarity around priorities and with stakeholders aligned around a common goal, leaders can respond swiftly and confidently to opportunities to turn a vision into a reality.
10 yrs
The average span of an NHS estates masterplan.
Additional benefits of an estates masterplan:
- Identifies surplus or underutilised land that can support the broader ICS strategic estates plan and delivers benefits for the patients, staff and wider system partners.
- Avoids unnecessary spending by making more efficient use of existing resources, identifying where spaces can be repurposed or how underutilised functions can be relocated to free up land for new development.
- Enhances patient care and staff satisfaction by devising more comfortable and efficient healthcare spaces that promote wellbeing and productivity.
- Supports sustainability goals by incorporating strategies that optimise energy efficiency, reduce waste and deliver long-term cost savings.
- Provides a framework that enables strategic decision-making and efficient use of capital resources
- Promotes early engagement with the local authority and community to speed up planning and decision making.
Prime acknowledges that the creation of ICSs means that many trusts are still on a journey to assess the infrastructure, facilities and services within their remit. However, as these structures evolve, trusts can take advantage of a more holistic viewpoint to plan more strategically for the needs of entire populations served by the ICS.
02 Focus on what you can control
While the funding rules around CDEL have hampered trusts’ efforts to modernise NHS infrastructure, estate transformations can still be achieved by embracing alternative solutions and focusing on solutions that don’t require external approval.
Successful examples of off-balance sheet finance solutions that could unlock the potential of an NHS estate include:
Keyworker accommodation
The challenge
A lack of affordable housing close to hospital sites is becoming an acute challenge for keyworkers, stifling NHS recruitment and retention strategies.
The solution
Hyve by Prime is a solution that works by redeveloping existing NHS buildings/land or acquiring a suitable new site to develop modern, flexible keyworker accommodation. Prime, acting as investor, developer and rental manager, removes all demand risk for NHS trusts through this off-balance sheet solution.
Car parks
The challenge
A lack of car parking facilities, complicated road layouts and confusing wayfinding impact the experiences of patients, staff and visitors and can limit the availability of redevelopment space.
The solution
The development of multi-storey car parks or park & ride facilities can unlock the potential of constrained NHS estates. In addition to improving the quality and capacity of parking for patients and freeing up additional land for new patient services, innovative funding schemes can generate sustainable revenue for trusts and enhance a trust’s sustainability and social value metrics.
By partnering with visionary leaders, embracing alternative solutions and strategically planning, Prime helps trusts break down barriers and unlock the potential of an estate. With Prime as an ally, leaders have access to the property and commercial expertise that builds the momentum needed to deliver estates fit for the future.
05 Progress in action: enabling strategic transformation at Dorset County Hospital
In 2017, Dorset County Hospital NHS Foundation Trust (DCH) and Prime entered a 10-year joint venture partnership to devise a blueprint to deliver the trust’s estate strategy. In addition to preparing and shaping a strategic estates masterplan, Prime’s involvement extended to designing, securing funding and building a new future for DCH.
By phasing the work, we’re tackling projects in a strategic sequence. This frees up underutilised space, transforming some opportunities into revenue generators, all while ensuring the entire masterplan comes to life.
Phase 1
Multi-Storey Car Park (MSCP)
Before partnering with Prime, DCH struggled to accommodate rising demand within its Emergency Department and ICU, driving an urgent need for additional space and facilities to ensure patient safety and care. With a lack of space on its estate for clinical expansion, the trust needed a pivotal solution to open the door to all future growth.
Developing a solution-focused parking and wayfinding project was the first critical step in the whole masterplan. In addition to paving the way for clinical expansion, a new multi-storey car park would solve the congestion and parking problems that frustrated patients, staff and the local council.
Through proactive communication and engagement, Prime secured the backing of key stakeholders to deliver this once-in-a-generation reconfiguration of the hospital site.
Phase 2
Keyworker accommodation
Against the backdrop of a national crisis in medical staffing and in an area where house prices are considerably higher than the national average, keyworker accommodation has become a critical issue for DCH.
DCH prioritised the provision of keyworker accommodation to maintain a pipeline of international and UK staff, reducing the risk of overreliance on costly agency nurses. However, its existing option of shared/student-style accommodation, constantly occupied by a rotation of junior doctors and medical students, and a portfolio of disparate and varying-quality private homes did not support its ambition.
The trust uncovered the opportunity to acquire a block of 63 brand-new 2-bedroom affordable homes in close proximity to the hospital, but current NHS capital financing rules prohibited the purchase. With planning approved and construction in progress, Prime stepped in and bought all of the apartments.
By devising a commercial structure and funding model that met the trust’s needs and didn’t require NHS capital, demand guarantees or approvals, DCH staff can now benefit from affordable, high-quality, furnished housing they can call home.
06 Without momentum, change is impossible
The winds of change in recent years have been fierce for the healthcare community. Uncertainty is inevitable, and shifting sands can blur the path forward, creating costly detours. But with a robust estates masterplan as a compass, leaders can more confidently navigate an increasingly bureaucratic system.
A masterplan is more than just a roadmap; it’s a shield against uncertainty and spiralling costs, underpinning every decision, even in the most challenging times-propelling trusts towards a clear, well-understood vision. It’s the beacon that inspires action and keeps everyone pulling in the same direction. It is a living document capable of evolution as needs change, not simply a compliance exercise to be put on the shelf when completed.
We hope that the examples in this report highlight the transformative power and potential of masterplanning and inspire leaders to take bolder steps – mitigating the costly risk of inaction to hospital finances and operational performance.
Join the conversation, discuss ideas and explore ways to create value, generate income and deliver new facilities for your health and care service.
References
1 The past and future of UK health spending, The Institute for Fiscal Studies (IFS), 2024
2 The BMJ Commission on the Future of the NHS, 2024
3 One in five waiting for hospital care in England, survey suggests, BBC, 2024
4 Building materials and components statistics: May 2024, Department for Business & Trade
5 The past and future of UK health spending, The Institute for Fiscal Studies (IFS), 2024