A healthy NHS? What does the future hold for the healthcare estate?

Emma Bolton, Tim Wigglesworth and Claire Harrison, Chief Executives of our consultancy businesses Community Ventures, Shared Agenda and Parallel, explore what challenges the NHS estate is facing.

2024 is building to be a year of political significance for the UK, with a general election looming and increasing global pressures spanning climate change, conflict, security and migration. Having lived through turbulent economic, social and political times over recent years, we all know the importance of being prepared for the unexpected – so how can we best prepare ourselves for change?

Those of us working with the NHS spent much of 2023 eagerly expecting guidance on the development of Infrastructure Strategies to be released by NHS England. Our understanding is that these strategies will replace those developed in 2018 by Sustainability and Transformation Partnerships (STPs) and will be used by health systems to plan their capital prioritisation for the coming years. The strategies will look at estate as part of the wider infrastructure context, which will also consider technology and other major equipment, and they have the potential (if developed well) to look at the interdependencies between digital transformation and estates for the first time.

At the time of writing, the guidance still has not been released. We are told that this will now be encompassed within the 2024-25 Planning Guidance. On 22nd December, an update on planning for 2024/25 was released by NHS England which said:

“Discussions with Government on this (the funding and actions the NHS has been asked to take to manage pressures created by industrial action) remain live, and we will therefore not be able to publish the 2024/25 priorities and planning guidance until the new calendar year…The priorities and objectives set out in the 2023/24 planning guidance…will not fundamentally change.”

Looking at the 2023/24 guidance, estate is briefly mentioned. We know that there is a desire to improve the use of NHS estate and there is mention of the ICS infrastructure strategies as part of systems’ steps to ‘create stronger, greener, smarter, better, fairer health and care infrastructure together with efficient use of resources and capital to deliver them’.

Our teams are working with systems across the North of England who are commencing work on their Infrastructure Strategies prior to the guidance being released. Whilst the focus and the drive for this cohesive, holistic view of a system’s infrastructure is commendable, there is rightly a question about what happens next once there is an understanding of what is needed. In this article, we focus on what are likely to be some of the key themes emerging from the strategies, and we look at what the focus is going to be for 2024. These themes will be the subject of a series of articles over the coming months, however we’ve summarised them here.

Theme 1 – doing more with less (or the same revenue) – the focus on Cost Improvement Plans is back following a reprieve during Covid. We know that NHS estate running costs rose by 12% in 22/23 to £12.4m per annum1, and it is possible that estate rationalisation and reduction will be seen as a less contentious option in comparison to cutting services. It is likely that NHS organisations will feel that many of their quick wins have already been achieved, and we are delivering creative solutions with Trusts who need to look at new ways of reducing their day-to-day running costs. There should be caution in creating an expectation that estates can be the answer to revenue problems, as reduction in portfolio is rarely a quick or easy solution and decisions depend on the availability of replacement estate, the estate tenure/restrictions and what the market is doing in the area (or country) at the time.

As part of trying to do more with the NHS pound, there will be a need to look more closely at how estate is being utilised, with a focus on actual activity being carried out in buildings as opposed to space that is being booked but which is not being used to full capacity. We have expertise in providing space utilisation surveys and reporting, along with the critical ‘so what’ analysis of the outputs from these surveys, and we are seeing demand for these services growing. This work links closely with systems’ digital plans, as organisations continue to appreciate the possibility of harnessing the technology gains developed during the pandemic, and with behavioural cultures regarding the use of space. Allied to this is the need for a broader approach to integration between organisations around making best use of collective estate rather than allowing ownership to drive allocation and use.

Theme 2 – working with restricted capital – The DHSC capital budget will reach £11.2bn in 2024, however, this only returns the capital spending to where it was in 20102 and this comes at a time when the latest Estates Returns Information Collection (ERIC) reports a year-on-year increase in backlog maintenance of 13.6%, to £11.6bn3. Only a proportion of NHS capital is spent on estate, and it is easy to see that focus will be on mending existing estate rather than focusing on the new developments and service improvements that are required to meet technological and diagnostic advancements and increased patient demand. As mentioned in the previous section, understanding what function the estate serves and whether its use is core, flex or tail will be of paramount importance in deciding where scarce capital should be deployed.

The absence of dedicated NHS capital funding streams for primary care following the termination of the Estates and Technology Transformation Fund (ETTF) programme will continue to marginalise primary care, which should (in our opinion) have increased importance in today’s NHS as the main way to reduce hospital attendances. The shortage of public sector capital raises the question about alternative funding models with the private sector to be considered, and it will be interesting to see what policy decisions might be made in this area by the incumbent or future government.

Theme 3 – data integration – as systems move to collaborate more closely it is essential that there is a ‘single source of truth’ in terms of management information. Different technology platforms, varying levels of maturity of data systems and issues around confidentiality can be barriers to this, and a common framework is not in place for sharing of estate-related information. Being able to ensure that comparisons can be made across NHS organisations on a like-for-like basis is an important component in driving strategy towards evidence-based decisions. At Parallel, we specialise in interactive mapping, data visualisation and insight and as the provider and developer of the DHSC’s SHAPE tool we have core skills in helping organisations to untangle their information problems. We are including more and more information in our data sets to help to create a platform for better decision making.

Theme 4 – political uncertainty and more restructuring – following the creation of ICBs there has been a further restructuring, with many systems looking to reduce people-related running costs given Running Cost Allowance (RCA) reductions of 30% being imposed by 2025/264. Understandably, this has led to some internal focus within the NHS as people have job uncertainty. Trusts have had the impact of industrial action and the pressure to collaborate comes at a time of significant other pressures. Social care and health care remain fragmented and this can reduce efficiencies and restrict collaboration opportunities.

On the estates side, we know that the profession is ageing, with 34% of the NHS workforce over 55 years old (as at 2022)5, and restructures offer opportunities for people to take early retirement, so there is a risk that the experienced estates expertise in the NHS will be lost. Sir Robert Naylor noted in 2017 that skills and capacity in estates strategy within the NHS was limited6, and those with these skills is expected to further diminish in the coming years. The forthcoming election will bring a period of Purdah (we will have 2 periods of Purdah in 2024, as there are local elections as well) which will potentially lead to more stagnation and an absence in decision making.

Theme 5 – clinical pressures – while all of this goes on, we all work in, and with, the NHS in order to make a difference to the patient. Patient demand is increasing, with more than 2.1 million A&E attendances and 545,000 emergency admissions in November 2023. Demand for cancer services are at record levels, and there has been a one million increase in patients accessing mental health services in the last five years7. Winter pressures continue to be a significant problem for the NHS, with over 1,200 patients a day in hospital with flu or norovirus, and over 3,300 patients a week being admitted in December 2023 with Covid-198. Poverty is deepening, having returned to pre-pandemic levels with around two in every ten adults in the UK being in poverty9, and there is a circular pattern, in which poverty creates health issues which then deepen poverty levels due to the employment barriers that this produces. Measures need to be put in place that improve preventative healthcare and join up the link between health and social care.

The estate can be a major barrier to improving these pressures or an enabler to delivering successful outcomes. For example, we have seen the creation of the Additional Roles Reimbursement Scheme in primary care, but the estate implications have often meant that staff cannot be fully deployed. On the other hand, the creation of new and repurposed Community Diagnostic Centres offer the prospect of reduced waiting times and faster diagnosis and testing, albeit subject to workforce capacity. We also need to think about the impact of the estate on healthcare outcomes, and try to deliver estate that is geographically accessible and promotes a healthy environment for patients and staff.

Theme 6 – sustainability – this cross-cutting theme is an area where we know significant work needs to be undertaken in order to meet the NHS pledge to be net zero by 2024. The secondary care estate currently produces 2,351 ktCO2e in emissions a year, and there is a plan to reduce this through engineering upgrades, better building optimisation through social technical interventions and through better use of rooms and ground spaces to shift to on-site renewables. Delivering net zero in the primary care estate is more complex given the diverse ownership models, and the estimated 167 ktCO2e per year emitted from these buildings is not insignificant in the NHS’s journey to carbon neutrality. Collaboration within ICSs provides an excellent opportunity for transformation at scale and for sharing of knowledge in this vital area. Sewell Group’s recent Refit_2050 service brings together our diverse estates expertise to help our customers transform their buildings whilst addressing ethical pressures, rising energy costs and shifting policies.

Change is guaranteed, but our attitude towards it can be shaped. By working collaboratively with our clients, we always find a solution that works for them, their staff, patients and wider stakeholders.

What does the future hold for the NHS healthcare estate?

Left to right: Tim Wigglesworth, Chief Executive of Shared Agenda | Emma Bolton, Chief Executive of Community Ventures | Claire Harrison, Chief Executive of Parallel