Uneasy lies the head that wears the crown: Capital Strategy After the 10-Year Health Plan
Trusts are in the lead – and that brings responsibility
The Government’s 10 Year Health Plan envisages a world that is very different from that of the last 15 years. In capital planning, as with other aspects of delivering, Trusts are being given freedoms and responsibilities that they have been prevented from exercising. Arguably, not enough – but there are some strong keys to change for those willing to think very differently:
Reintroducing PPP for primary and community health is a meaningful step forward and means that the NHS is once again not wholly reliant on central budget-funded capital (ie “CDEL”), but the lack of PPP for acute facilities means Trusts need a Plan B. We are still well behind where we were when PFI, LIFT and leasing all worked together to bring fundings from outside CDEL.
With construction costs soaring, acute hospitals are too expensive to keep replicating “as is” – care must shift into lower-cost community estate.
With dispersed operations comes some diseconomies of scale/scope: Tech is going to be key to managing dispersed services and must be central to Trust leaderships’ thinking on estates.
Multi-year budgets and capital freedoms provide real opportunity – but only if Trusts do the work.
New funding tools (like borrowing against land sale receipts) and clarity on income-generating schemes are very welcome.
Implementing the 10 Year Plan in the world of capital
PPP for Community – But No Route for Acute Yet
The 10-Year Health Plan marks a shift in tone on capital. After years of silence, we finally have policy that explicitly welcomes private finance – but only for Neighbourhood Health Centres and other community-facing infrastructure.
That’s progress. A few years ago, PPP wasn’t really in the conversation. Trusts had lost leasing as a route and private finance as a route - and all that was left was a hopelessly oversubscribed and inadequate CDEL settlement. So we should be pleased that this additional avenue is open.
Leaving out acute, though, seems to reflect a continued scepticism around hospital investment. And that leaves Trusts in a difficult position. Many are dealing with large, failing buildings and no credible route to fund replacement. For them, PPP remains the only viable option – even if it’s not yet sanctioned centrally. We’ve become so used to infrastructure failure that we barely register it: rat infestations, sewage leaks, walls and ceilings collapsing, buildings held up by scaffolding. According to one health journalist’s newsletter, part of St Mary’s Hospital nearly fell onto Paddington Station recently. Whether or not that’s fully accurate – there’s no official confirmation – what’s troubling is that it wouldn’t be surprising. Events like that used to be front-page news. Now they’re just part of the background. I worry we are sleepwalking into a major catastrophe.
I don’t think the battle is lost, though. The door is ajar. But Trusts can’t wait. They need a Plan B: one that moves more services into the community, makes better use of local land value, and shrinks the hospital footprint to only what absolutely must remain. This article talks about what that kind of Plan B might look like, using some of the enablers in the 10 Year Plan.
We Can’t Keep Building Billion Pound Hospitals
The economics of large, comprehensive, fully-integrated hospitals no longer stack up. Construction costs for modest DGH replacement projects are now north of £1.5bn. That figure is hard to justify, especially when much of the activity inside those hospitals could – and should – be done elsewhere.
As we said in What can we do the accelerate capital?, the centralised hospital of the past was built for a different care model. Today, only a few services need to be in that environment: A&E, intensive care, hot diagnostics, some maternity. Most outpatient activity can happen in lower-spec facilities which could be in the community. Elective procedures can move to standalone day case centres. Long-stay patients can be managed in community or step-down units – or, ideally, at home.
In the past, there was a logic to co-location: communication, patient transfers, scheduling, handovers, workforce flexibility. But with modern communications, scheduling tech, and virtual triage, that rationale is weakening. If we accept that, then it follows that we can no longer afford to keep shovelling activity into increasingly expensive acute space. The hospital footprint must shrink.
Tech is the Key to a Dispersed Model
The Plan leans heavily on technology: virtual appointments, remote diagnostics, online booking and triage. This is the “bricks to clicks” shift. But we can’t just implement this in service terms. It has to change how we use our estate.
A Trust moving 90% of outpatient appointments online can’t be left holding the same number of consultation rooms. The estate must follow the care model.
There’s another piece here: if we’re serious about shifting activity out of hospitals, then we need to manage a dispersed estate model. That means using tech not just for care, but for operational control – scheduling, workflow, and workforce deployment across multiple sites. That may mean capital investment in digital systems or revenue spend on tech-enabled services. Either way, the estate strategy needs to keep up. In a later article, we will talk about how some of the innovations and funding methods the estates community has developed might be applied to tech.
Multi-Year Budgets and Strategic Planning Must Now Deliver
One of the best things in the Plan is the commitment to multi-year capital budgets. That gives Trusts space to plan and commit – and avoid the last-minute fire-sale of capital spend in Q4.
But that breathing space only works if it’s used. That means better planning, at a granular and costed level. Thanks to NHS Estates & Facilities, we now have early-stage ICS Strategic Estates Plans. They’re a start – but they’re nowhere near enough on their own. Trusts need to go further. They need delivery-ready site strategies – not just estate maps, but linked investment pipelines, with cost, phasing, sequencing and impact. These plans should show not just how the estate will support service delivery, but how it will enable change. And we have to start developing a new model of procurement which will allow for contracting in advance which enables elements of the plan to be brought forward and pushed back to work with available capital budgets. Not easy, but there are Trusts having a go at this.
We’re now at the point where capital investment isn’t just a support function. It’s the route to service transformation. But that only works if the plans are real.
New Tools: Receipts, Revenue, and Risk-Taking
The Plan gives Trusts a few new tools – and some long-overdue clarity. Highlights include:
Ability to forward-fund against land receipts – this is a game-changer for site-constrained Trusts. It means you can build up before selling, which makes better use of urban value and will help solve chunky decant problems.
Explicit permission to pursue income-generating assets – car parks, energy centres, key worker housing. These projects don’t just help the balance sheet – they enable wider site development.
FT freedoms restored – Trusts can borrow again and reinvest their surpluses. This is an important shift. It gives Trusts room to lead their own capital programmes – but only if they have the appetite and the planning capacity to use it well.
Together, these add up to a significant opportunity – especially for organisations willing to take a longer view, invest in planning, and think beyond the hospital boundary.
Conclusion: It’s Time to Lead from the Frontline
This Plan won’t solve the capital crisis. Acute PPP is still off the table.
But it does offer a clear direction for those willing to take it. It backs Trusts to lead. It offers tools. And it sets out a model where more care is delivered outside the hospital, in lower-cost, more flexible settings.
For CEOs and estates leads, the signal is clear: don’t wait for permission. Start shrinking your hospital. Start building in the community. Use tech to hold it together. And use every freedom and funding tool you’ve been given to get on with it.
If the next generation of capital programmes come from a newly empowered frontline, this Plan might just be the moment where things started to shift.
