Denis Campbell Health policy editor
THE GUARDIAN
Wed, 3 July 2024 a
Patients were evacuated from Stepping Hill hospital in Stockport when some ceilings fell down.Photograph: Manchester Evening News Syndication
Scores of hospitals in England are so old and decrepit that some are falling down. The Conservative government recognised that the NHS needed a massive modernisation of its estate in 2019 when Boris Johnson promised 40 new hospitals by 2030.
But, with public spending due to be tight for the next few years, where would a new government find the money to enable these other projects to go ahead? NHS Providers, which represents trusts, has put forward a new wave of NHS/private-sector partnerships as a potential answer.
Why are so many hospitals in England in such a bad state?
That is partly because so many NHS premises are old, and also because the NHS’s capital budget – which it uses to pay for repairs, build new facilities and buy new equipment such as scanners – has been held down for many years. The cost of all the maintenance repairs needed across the NHS has soared from £4.7bn in 2011-12 to £11.6bn in 2022-23.
But are 40 new hospitals not due to be built by 2030?
Boris Johnson promised in 2019 to do just that, but the new hospitals programme has been beset by cost overruns, confusion over when promised new facilities would finally arrive and a growing number of trusts saying their schemes would not be ready until after 2030.
Plus, while 100 health trusts applied to join, 88 were refused entry, even though parts of some of them – such as Stepping Hill hospital in Stockport – are literally falling down.
So what is NHS Providers proposing?
That the Treasury overhauls the Department of Health and Social Care’s capital departmental expenditure limit (CDEL) rules, which restrict how much money the NHS can spend on building projects, even if some of that money comes from external sources.
Julian Hartley, the head of NHS Providers, wants the new government to apply “fresh thinking” and “imagination” to how the health service can access potentially billions of pounds to build new facilities – by collaborating with property developers, private healthcare companies, pension funds, drug companies, universities and local councils.
Critics claim this would just be a rerun of PFI. What is the concern?
The private finance initiative was used to build an array of new hospitals in the 1990s and 2000s. It was a way of keeping finance used to fund public infrastructure such as schools and hospitals off the Treasury’s balance sheet for reporting public debt.
But under it, developers made profits which, in some cases, were considered obscene. In 2019, the IPPR thinktank calculated that the NHS would end up paying £80bn for £13bn worth of new hospital buildings, so extortionate were the terms their private partners obtained. Trusts spend more than £2bn a year on PFI repayments.
The Commons public accounts committee found in a 2018 report that the “ongoing costs to the institutions at the frontline have been high and the contracts inflexible”. The committee concluded that the “deal is not working for the taxpayer”.
Keep Our NHS Public fears that new joint NHS/private arrangements would again lead to a “need to siphon off taxpayer money to private companies and their shareholders”.
Could Labour act on Hartley’s suggestion?
Wes Streeting, the shadow health secretary, has made clear that he expects the NHS to use the private sector to clear as much of the care backlog as possible. It is unclear, though, if he would see NHS/private sector collaborations as a viable way for health trusts to unlock much-needed funding to enable them to press ahead with building much-needed new facilities.
On Monday, the Health Service Journal asked him if he would relax the Treasury’s CDEL rules, so that trusts could more easily partner with property developers and pension funds on construction projects. He acknowledged trusts faced obstacles accessing capital spending which caused “immense frustration”, and that the shadow chancellor, Rachel Reeves, understood “the scale of the capital challenge in the NHS”.
But, he added, “Treasury rules exist for a reason” and there are “lots of competing demands” for capital, which Labour would have to consider.
However, it is not inconceivable that Labour, which mentioned “partnership” with business 18 times in its manifesto, may be persuaded to explore Hartley’s idea as a way of using private money to rebuild the NHS’s aged, crumbling infrastructure, given the financial position it will inherit.
NHS leader calls for partnership with private sector to build new hospitals
Wed, 3 July 2024 a
Patients were evacuated from Stepping Hill hospital in Stockport when some ceilings fell down.Photograph: Manchester Evening News Syndication
Scores of hospitals in England are so old and decrepit that some are falling down. The Conservative government recognised that the NHS needed a massive modernisation of its estate in 2019 when Boris Johnson promised 40 new hospitals by 2030.
But, with public spending due to be tight for the next few years, where would a new government find the money to enable these other projects to go ahead? NHS Providers, which represents trusts, has put forward a new wave of NHS/private-sector partnerships as a potential answer.
Why are so many hospitals in England in such a bad state?
That is partly because so many NHS premises are old, and also because the NHS’s capital budget – which it uses to pay for repairs, build new facilities and buy new equipment such as scanners – has been held down for many years. The cost of all the maintenance repairs needed across the NHS has soared from £4.7bn in 2011-12 to £11.6bn in 2022-23.
But are 40 new hospitals not due to be built by 2030?
Boris Johnson promised in 2019 to do just that, but the new hospitals programme has been beset by cost overruns, confusion over when promised new facilities would finally arrive and a growing number of trusts saying their schemes would not be ready until after 2030.
Plus, while 100 health trusts applied to join, 88 were refused entry, even though parts of some of them – such as Stepping Hill hospital in Stockport – are literally falling down.
So what is NHS Providers proposing?
That the Treasury overhauls the Department of Health and Social Care’s capital departmental expenditure limit (CDEL) rules, which restrict how much money the NHS can spend on building projects, even if some of that money comes from external sources.
Julian Hartley, the head of NHS Providers, wants the new government to apply “fresh thinking” and “imagination” to how the health service can access potentially billions of pounds to build new facilities – by collaborating with property developers, private healthcare companies, pension funds, drug companies, universities and local councils.
Critics claim this would just be a rerun of PFI. What is the concern?
The private finance initiative was used to build an array of new hospitals in the 1990s and 2000s. It was a way of keeping finance used to fund public infrastructure such as schools and hospitals off the Treasury’s balance sheet for reporting public debt.
But under it, developers made profits which, in some cases, were considered obscene. In 2019, the IPPR thinktank calculated that the NHS would end up paying £80bn for £13bn worth of new hospital buildings, so extortionate were the terms their private partners obtained. Trusts spend more than £2bn a year on PFI repayments.
The Commons public accounts committee found in a 2018 report that the “ongoing costs to the institutions at the frontline have been high and the contracts inflexible”. The committee concluded that the “deal is not working for the taxpayer”.
Keep Our NHS Public fears that new joint NHS/private arrangements would again lead to a “need to siphon off taxpayer money to private companies and their shareholders”.
Could Labour act on Hartley’s suggestion?
Wes Streeting, the shadow health secretary, has made clear that he expects the NHS to use the private sector to clear as much of the care backlog as possible. It is unclear, though, if he would see NHS/private sector collaborations as a viable way for health trusts to unlock much-needed funding to enable them to press ahead with building much-needed new facilities.
On Monday, the Health Service Journal asked him if he would relax the Treasury’s CDEL rules, so that trusts could more easily partner with property developers and pension funds on construction projects. He acknowledged trusts faced obstacles accessing capital spending which caused “immense frustration”, and that the shadow chancellor, Rachel Reeves, understood “the scale of the capital challenge in the NHS”.
But, he added, “Treasury rules exist for a reason” and there are “lots of competing demands” for capital, which Labour would have to consider.
However, it is not inconceivable that Labour, which mentioned “partnership” with business 18 times in its manifesto, may be persuaded to explore Hartley’s idea as a way of using private money to rebuild the NHS’s aged, crumbling infrastructure, given the financial position it will inherit.
NHS leader calls for partnership with private sector to build new hospitals
Denis Campbell Health policy editor
THE GUARDIAN
Wed, 3 July 2024
An artist’s impression of Birmingham’s private Harborne hospital, where the local NHS trust has leased 72 beds over two floors.Illustration: Harborne hospital
The NHS must be given the green light to partner with private health firms and property developers to build new hospitals to slash the care backlog, a health service boss has said.
The last Labour government was widely criticised over controversial private finance initiative (PFI) deals to erect scores of new NHS facilities that led to vast profits for major corporations.
But in a major intervention the head of NHS Providers, Julian Hartley, has urged the next administration to relax Treasury rules that limit health service trusts in England from entering into such collaborations and insisted that the NHS has “nothing to fear” from them.
He said: “We need to think outside the box when it comes to solving this double whammy of under-strain public finances and an NHS estate in desperate need of renewal.
“Collaboration with public and private partners such as ethical pension funds, property developers, universities, private healthcare providers and local councils could unlock opportunities for NHS trusts keen to build new hospitals or redevelop existing sites which have been stymied by rigid Treasury rules.”
However, Dr John Puntis of Keep Our NHS Public said most people would find his suggestion “appalling” and that it constituted “a shocking attack on the founding principles of the NHS” as it prepares to mark the 76th birthday of its creation on Friday.
Hartley cited recent partnerships between NHS trusts in Birmingham and Surrey and private health providers to run newly built facilities, which treat NHS and fee-paying patients, as “successful examples of NHS and private sector collaboration. We can draw positive lessons that this is doable, that the NHS and the private sector can work together, and that it supports the interests of NHS services”.
“This doesn’t have to be PFI Two. This is not about privatisation of the NHS; this is about strengthening and supporting the NHS through investment that creates better facilities for patient,” Hartley added.
University Hospitals Birmingham (UHB) trust has been given operational control of 72 of the 122 beds in the Harborne private hospital on its site, which opened in January in a partnership between it and HCA, a large American healthcare firm which operates a network of private hospitals in the UK. UHB did not contribute towards the £100m cost of building the hospital, which provides cancer, cardiac and orthopaedic care, but has taken a lease on two of its eight floors for its own patients.
The extra beds will let people in Birmingham and Solihull get quicker treatment “in world-class facilities, delivered by leading NHS specialists” by cutting its waiting list, it has said.
In a similar move the Royal Surrey NHS trust and Genesis Cancer Care have entered into an arrangement to run a new dedicated cancer centre, which opened in Guildford, Surrey in March. The £30m facility is providing oncology and radiotherapy to NHS and private patients.
Hartley urged whoever are the chancellor and health secretary after the UK general election to “have an open mind” on NHS tie-ups involving major injections of capital from drug companies, pension funds and universities. The new government should see the new wave of hospitals that would ensue as a boost to the economy and a way of the public sector leveraging private sources of funding at a time when government spending is likely to remain tight, he said.
He wants the Treasury to review the Department of Health and Social Care’s capital departmental expenditure limit (CDEL), which restricts how much health trusts and the NHS overall can spend on capital projects, even if some of the money has come from external sources. The backlog of repairs needed across the NHS in England has ballooned in recent years to £11.6bn.
Keir Starmer and the shadow health secretary, Wes Streeting, have said that under a Labour government the NHS will use the private sector as much as it can to cut a backlog that has spiralled to 7.6m procedures. Acting on Hartley’s idea would risk angering those anxious about NHS privatisation.
Hartley highlighted that scores of NHS trusts were left unable to rebuild or replace sometimes dangerously decrepit facilities when, of the 100 that applied to join the New Hospitals Programme, the scheme to implement the pledge of the then prime minister, Boris Johnson, to build “40 new hospitals” by 2030, only 40 were given entry because numbers were capped.
David Hare, chief executive of the Independent Healthcare Providers Network, which represents private health providers, said: “There is huge appetite in the independent sector to partner with the NHS and bring much-needed new capital, capacity and capability to support better access to NHS services for patients free at the point of use.”
But David Rowland, director of the Centre for Health and the Public Interest thinktank, warned that NHS/private partnerships would “hasten a two-tier health system”. He accused Hartley of displaying “astonishing naivete” in his attitude to “the for-profit sector, particularly those with private equity backers”. Such firms are only interested in the NHS so they can “use the highly trained NHS workforce to treat those patients who can afford to pay privately and jump the queue.
“The last Labour government thought that getting into bed with the private sector to finance, build and operate NHS hospitals under the PFI programme would bring in investment and expertise. In reality it has led to huge amounts of money leaking out of the NHS in the form of profits and has saddled NHS Trusts with massive, crippling debt repayments.
“The mistakes from this fiasco should not be repeated.”
Wed, 3 July 2024
An artist’s impression of Birmingham’s private Harborne hospital, where the local NHS trust has leased 72 beds over two floors.Illustration: Harborne hospital
The NHS must be given the green light to partner with private health firms and property developers to build new hospitals to slash the care backlog, a health service boss has said.
The last Labour government was widely criticised over controversial private finance initiative (PFI) deals to erect scores of new NHS facilities that led to vast profits for major corporations.
But in a major intervention the head of NHS Providers, Julian Hartley, has urged the next administration to relax Treasury rules that limit health service trusts in England from entering into such collaborations and insisted that the NHS has “nothing to fear” from them.
He said: “We need to think outside the box when it comes to solving this double whammy of under-strain public finances and an NHS estate in desperate need of renewal.
“Collaboration with public and private partners such as ethical pension funds, property developers, universities, private healthcare providers and local councils could unlock opportunities for NHS trusts keen to build new hospitals or redevelop existing sites which have been stymied by rigid Treasury rules.”
However, Dr John Puntis of Keep Our NHS Public said most people would find his suggestion “appalling” and that it constituted “a shocking attack on the founding principles of the NHS” as it prepares to mark the 76th birthday of its creation on Friday.
Hartley cited recent partnerships between NHS trusts in Birmingham and Surrey and private health providers to run newly built facilities, which treat NHS and fee-paying patients, as “successful examples of NHS and private sector collaboration. We can draw positive lessons that this is doable, that the NHS and the private sector can work together, and that it supports the interests of NHS services”.
“This doesn’t have to be PFI Two. This is not about privatisation of the NHS; this is about strengthening and supporting the NHS through investment that creates better facilities for patient,” Hartley added.
University Hospitals Birmingham (UHB) trust has been given operational control of 72 of the 122 beds in the Harborne private hospital on its site, which opened in January in a partnership between it and HCA, a large American healthcare firm which operates a network of private hospitals in the UK. UHB did not contribute towards the £100m cost of building the hospital, which provides cancer, cardiac and orthopaedic care, but has taken a lease on two of its eight floors for its own patients.
The extra beds will let people in Birmingham and Solihull get quicker treatment “in world-class facilities, delivered by leading NHS specialists” by cutting its waiting list, it has said.
In a similar move the Royal Surrey NHS trust and Genesis Cancer Care have entered into an arrangement to run a new dedicated cancer centre, which opened in Guildford, Surrey in March. The £30m facility is providing oncology and radiotherapy to NHS and private patients.
Hartley urged whoever are the chancellor and health secretary after the UK general election to “have an open mind” on NHS tie-ups involving major injections of capital from drug companies, pension funds and universities. The new government should see the new wave of hospitals that would ensue as a boost to the economy and a way of the public sector leveraging private sources of funding at a time when government spending is likely to remain tight, he said.
He wants the Treasury to review the Department of Health and Social Care’s capital departmental expenditure limit (CDEL), which restricts how much health trusts and the NHS overall can spend on capital projects, even if some of the money has come from external sources. The backlog of repairs needed across the NHS in England has ballooned in recent years to £11.6bn.
Keir Starmer and the shadow health secretary, Wes Streeting, have said that under a Labour government the NHS will use the private sector as much as it can to cut a backlog that has spiralled to 7.6m procedures. Acting on Hartley’s idea would risk angering those anxious about NHS privatisation.
Hartley highlighted that scores of NHS trusts were left unable to rebuild or replace sometimes dangerously decrepit facilities when, of the 100 that applied to join the New Hospitals Programme, the scheme to implement the pledge of the then prime minister, Boris Johnson, to build “40 new hospitals” by 2030, only 40 were given entry because numbers were capped.
David Hare, chief executive of the Independent Healthcare Providers Network, which represents private health providers, said: “There is huge appetite in the independent sector to partner with the NHS and bring much-needed new capital, capacity and capability to support better access to NHS services for patients free at the point of use.”
But David Rowland, director of the Centre for Health and the Public Interest thinktank, warned that NHS/private partnerships would “hasten a two-tier health system”. He accused Hartley of displaying “astonishing naivete” in his attitude to “the for-profit sector, particularly those with private equity backers”. Such firms are only interested in the NHS so they can “use the highly trained NHS workforce to treat those patients who can afford to pay privately and jump the queue.
“The last Labour government thought that getting into bed with the private sector to finance, build and operate NHS hospitals under the PFI programme would bring in investment and expertise. In reality it has led to huge amounts of money leaking out of the NHS in the form of profits and has saddled NHS Trusts with massive, crippling debt repayments.
“The mistakes from this fiasco should not be repeated.”
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