Jane Tabiner, managing director at asset finance provider, Solutions Asset Finance (SAF), explores how private-sector companies can support the NHS with financial solutions for much-needed equipment and facilities
It’s no secret that the NHS is currently facing its biggest capacity crisis in decades, with an estimated 4.7 million people awaiting surgical procedures.
And this, combined with the continued fight against COVID-19 and the most-ambitious vaccine rollout in history, means the NHS needs to look for new and innovative ways to operate.
To overcome the long-term ramifications of the pandemic, the NHS will require significant investment in the coming years, and budget allocation will be an important element of this.
Moving forward, it is necessary to transform how the healthcare industry operates financially, as well as how it engages with the private sector
Typically, though, NHS budgets are limited and often used for the most-pressing issues plaguing hospitals at any given time.
Moving forward, however, it is necessary to transform how the healthcare industry operates financially, as well as how it engages with the private sector.
And sourcing alternative funding methods, such as private asset finance, is a viable way for decision-makers within NHS trusts to obtain the amount of budget required to invest in necessary facilities and equipment that allow vital work to continue.
Private funding and finance options
Complex processes around securing funding often make it difficult for NHS trusts to upgrade or replace ageing equipment or build new facilities.
And, because funding can be limited, projects that are not considered critical to the ongoing operation of the hospital cannot always be pushed through, with more-pressing issues being prioritised and therefore taking up the allocated budget.
Moreover, NHS projects are often tied up in complex tendering processes, requiring extensive business cases and are managed via specific frameworks that sometimes make outright capital purchase the only option.
It’s essential to raise awareness of the alternative finance options available and encourage a cultural shift in the perceptions of leasing agreements to ensure effective collaboration across sectors
This is a common theme when financing projects within the public sector as a whole and more needs to be done to raise awareness of potential flexible funding options and the host of benefits they bring. It’s through an understanding of the advantages of these agreements, as well as how to seek them, that perceptions of viable alternatives, such as leasing, will improve across the entire public sector.
The NHS recognises the role that finance options can play in helping facilitate vital healthcare projects, and has established specific leasing procurement frameworks to ensure there are reliable and compliant suppliers available, who understand NHS specifications and requirements.
Funding solutions can be obtained in several ways, although typically they are made available by private companies that supply NHS trusts with medical buildings, equipment, devices, and more.
Conversations with private suppliers about potential funding options should be the first point of contact for an NHS trust looking to invest in something new, but looking to avoid an upfront capital purchase.
Chances are many of the suppliers that an NHS trust works with already will have a financial solution in place that can be utilised, meaning the trust can work with experts they’re already familiar with.
And there’s much to be considered when determining what finance can be made available to meet the specific needs of a trust.
However, the pre-determined budgets set for each organisation are the driving factors behind any agreements, and suppliers will implement the funding solution based on what the trust can afford and how long they will be needing the products, or facilities, in question.
Private financing for much-needed projects and equipment could be a transformative way of working in the public healthcare space, helping to respond to capacity needs by being agile and adaptable, while implementing cost-effective solutions that align to restrictive budgets
At SAF, we work with medical equipment specialists to create bespoke, branded solutions for the healthcare providers they work with.
For example, an NHS trust looking at buying 1,000 medical beds will have very-different requirements to one which might be interested in investing in a new modular facility.
Finance providers take the time to understand the unique situation of each organisation and then tailor their offering suit both them and the supplier.
Future resilience and recovery
As the last 12 months has shown, our hospitals must be futureproofed to respond to changing demands because priorities can change extremely quickly.
And, while the recent government investment into the NHS has unlocked many capital purchase opportunities for NHS trusts in the last year, this allowance will likely decrease as we move forward.
However, the demand for services will not subside for a long time.
It’s no secret that the NHS is currently facing its biggest capacity crisis in decades, with an estimated 4.7 million people awaiting surgical procedures
There has also been little conversation around the recovery of health and social care post pandemic, and public spending will likely be cut over the next five years to recoup much of the money spent to support workers and the economy in these challenging times.
Quite simply, this means NHS trusts will return to tighter budgets and lengthy timescales for investment opportunities.
A greater awareness of flexible finance options could offer trusts a vital lifeline, should they need it.
Private financing for much-needed projects and equipment could be a transformative way of working in the public healthcare space, helping to respond to capacity needs by being agile and adaptable, while also implementing cost-effective solutions that can align to restrictive budgets.
To respond to the ever-changing needs of our population, it is time to embrace new methods of facilitating healthcare projects if we are to emerge successfully from the COVID-19 pandemic.
It’s essential to raise awareness of the alternative finance options available and encourage a cultural shift in the perceptions of leasing agreements to ensure effective collaboration across sectors.
For NHS trusts wanting to determine if a funding option is available to them, their first port of call should be to see if their suppliers offer an alternative funding solution.
However, suppliers often don’t publicise the finance specifics, so it’s essential for trusts to ask the right questions and get all of the financial options available to them before proceeding.
With this, it’s important for trusts to consider all aspects of a project, including the quality of the project delivery and any anticipated changes in demand.
Typically, NHS budgets are limited and often used for the most-pressing issues plaguing hospitals at any given time
Many suppliers, such as modular building providers and medical equipment specialists, will likely have their own branded finance solutions in place to offer to their partners.
These suppliers will also likely sit on one of the NHS-approved frameworks, guaranteeing that the companies are compliant and will adhere to both quality and health and safety standards set out by the NHS.
Moving forward, I’d like to see suppliers include funding options within their business cases to offer NHS finance departments a holistic view of the options available to them.
This will ensure decision makers are well informed to make a decision that is cost effective and fulfils their requirements.
Improving this cross-sector collaboration will provide the NHS with cost-effective solutions that allow them to bounce back from COVID-19 pressures, while remaining resilient and adaptable for the future.