Review Suggests £10 Billion NHS Funding Increase Required

A major government review of property and estates has concluded that at least £10 billion of capital funding is required in order to deliver sustainability and transformation plans.

Proposals required in order to ensure that NHS facilities are fit for purpose will also be included within this figure.

The review has been conducted by by former University College London Hospitals Foundation Trust chief executive Sir Robert Naylor.

And although the £10 billion figure may be worrying, the report concludes that the NHS can save 60% of this amount by taking a more commercial approach to selling land and buildings under its auspices.

Naylor believes that if satisfactory incentives are put in place, estate management across the NHS will be able to raise a significant amount of the £10 billion figure itself.

But the review warned the £10 billion new capital requirement estimate was based on “a conservative estimate of backlog maintenance at £5bn”, so the actual situation could be even more serious.

If the £10 billion figure were not daunting enough in itself, the report also suggests that a similar sum will be required in order to deliver the ongoing Five Year Forward View.

Tough measures must be introduced, according to the Naylor-authored report, in order to address the capital shortage in the NHS.

And the document suggests that both STPs and NHS trusts should only be eligible for Central capital funding if they have developed plans that are suitably expandable and flexible.

“Areas and trusts “should not be granted capital funding…until they have agreed plans to improve performance against new benchmarks developed by this review,” the report suggests.

The review also asserts that it will be impossible for the NHS to acquire the necessary capital without explicit support from central government.

“The shortage could be met by contributions from three sources: property disposals, private capital (for primary care) and from the Treasury,” the report concludes.

Perhaps acknowledging the seriousness of the situation, Chancellor Philip Hammond has already moved to provide further capital funding for sustainability and transformation plans in the autumnal period.

The review also recommended that ministers should communicate more effectively with sustainability and transformation areas in order to ensure the success of the scheme going forward.

“Ministers must provide robust assurances to STPs that any sale receipts from locally owned assets will not be recovered centrally provided the disposal is in agreement with STP plans. The Treasury should provide additional funding to incentivise land disposals through a two for one offer in which public funds match disposal receipts.”

And the report also called for a targeted approach to the STP scheme, with major aspects of the estates being tested against measureables.

“STP estates plans and their delivery should be assessed against targets informed by the benchmarks developed for this review. STPs and their providers, which fail to develop sufficiently stretching plans, should not be granted access to capital funding either through grants, loans or private finance until they have agreed plans to improve performance against benchmarks.”

A Department of Health spokeswoman said: “welcome[d] Sir Robert Naylor’s report and the opportunities it identifies for the NHS to make best use of its estate.”

The spokeswoman went on to explain that the government has already committed itself to improving the way that the NHS estate sector operates, outlining some of the ethos for the remainder of the current Parliament.

“This government is committed to improving the NHS estate. A new NHS property board is setting a clear strategy for maximising the estate’s value, and the budget provided £325m of additional investment to start the transformation of NHS facilities so that they support the very best patient care and experience. We will fully consider all the recommendations in the report and respond later in the year.”


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