The true cost of inaction

A new report reveals why the NHS must address issues with its estate now, or risk losing millions of pounds

NHS trusts must act immediately to address the problem of ageing estates and backlog maintenance as new research reveals delays of just one or two years can lead to an increase in costs of between 20%-30%.

A new industry report, released by health and care property developer, Prime, makes the case for change in how NHS estates are developed and maintained in order to meet growing demand and tackle the limitations of ageing facilities.

And it reveals that even a one or two-year delay in developing an estates project can lead to an insurmountable 20-30% cost increase, with a 10-year delay more than doubling costs to a staggering 160%.


Time is running out

The report aims to inspire NHS trusts, GPs, and other care providers who want to unlock the true potential of their facilities, by showcasing those who are already transforming their estate and revealing the real cost of inaction.

Incorporating perspectives from senior leaders across health and care, it is based on interviews with those who have been instrumental in making change happen within health estates.

Insights from University Hospital Southampton and Yeovil District Hospital, law firm Bevan Brittan, investors Aviva and M&G, and professional service provider, WSP, share experiences to help others unlock the potential of their estate.

David French, chief finance officer at University Hospital Southampton, says: “There’s increasing recognition that the amount the NHS has invested in estate over the last two decades hasn’t been enough to deliver first-class healthcare, never mind that of an ageing population.

“Time isn’t our friend. And who knows what will happen politically? So you need to find different and innovative ways to solve the problems of 50-year-old crumbling buildings. It’s possible, so what’s stopping you?”


Fit for purpose?

And Sir Robert Naylor provides the report foreword, highlighting takeaways which show his 2017 review recommendations in action.

He states: “Revolutionary treatments, technological developments, leadership structures, different funding… one certainty in the NHS is constant change.

“But there is a critical area that has proved notoriously slow to evolve: estates.

“Get it right and trusts, GPs and care homes can adapt to meet the needs of today’s and tomorrow’s patients and visitors.

“Fail to take action and hospitals and surgeries will not be fit for purpose, continuing to deteriorate and damaging patient services and user confidence.”

The report adds: “In an uncertain world, there are two options for people looking to maintain, update, renovate and rejuvenate NHS estates.

“They can either hold on and hope for a more-certain future where politics and technology are no longer creating an ever-shifting landscape, if that time ever comes. Or they can forge ahead. Turn uncertainty into opportunity. Look for positives and possibilities. Blaze a trail and create a legacy to be proud of.”

The report states that to be successful the NHS needs to look holistically at entire geographical areas in order to decide how best to modernise and build capacity while enhancing quality, productivity and performance.

Experts advise building in flexibility, with Rosemary Jago, a partner at law firm, Bevan Brittan, saying: “What’s difficult is translating a clinical vision into an estates strategy that constantly has to evolve – and then delivering that while change is still happening.


Funding a balance

“The prioritisation and strategic sequencing of capital development that supports co-location, STP priorities, and integration, together with the need for flexible space – all needs to be built in to a robust estate delivery plan for it to work in the long-term.”

Using data will also be crucial.

Andrew Wildgust, director of healthcare advisory services at WSP, said: “Have a clinical strategy that isn’t about a general direction, but a solid, solutions-driven idea of where you want services to go.

“What are the issues with your estate? What are your commissioners telling you? What will your cancer services look like? What new services are your doctors looking to introduce? Does your chief executive support that?

“Then it’s possible to come up with a plan that suits your local population and corporate strategy and the STP’s view of life. There’s a lot to balance!”

While planning for the longer term, organisations must also look at the best funding methods.

The report outlines the advantages, and disadvantages, of various models, including using NHS capital, annuity funding, property investment funding, project finance, local authority finance and bonds and private equity.


Flexible and nimble

Commenting on the publication of the report, Leighton Chumbley, chief executive of Prime, said the promised funding outlined in the Government’s Health Infrastructure Plan will be a lifeline for some ageing health estate, but he warned that it won’t be enough to meet all the needs of every local system.

He said: “Estates decision-makers are already thinking flexibly and acting nimbly to make changes and manage demand and our report aims to inspire further action.”
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