A joint report from NHS Providers and PA Consulting shows how targeted capital investment could reduce waiting times, boost economic growth, and deliver housing for NHS staff, without increasing overall spending
A new report co-produced by NHS Providers and PA Consulting outlines how smarter capital investment in the NHS could generate a “win-win-win” for patient care, economic growth, and staff housing. It argues that by rebalancing funding towards infrastructure, the health service can modernise facilities, improve productivity, and support regional regeneration.
Unlocking the financial capabilities of the NHS
A new report, Investing in the NHS: Empowering the sector to drive productivity, renewal and growth, has shown how the NHS could unlock billions of extra funding for NHS buildings and equipment, regenerating the NHS estate with boosted economic growth and productivity.
The report highlights that years of underinvestment and challenges in capital spending have resulted in the NHS having facilities that are often outdated and unfit for purpose. Major NHS infrastructure projects generate funding, typically delivering more than a four-to-one return for every pound invested.
Furthermore, the report offers practical and deliverable solutions for the government that can reverse underinvestment and boost productivity.
The recommendations include:
- Gradually increase the share of health spending on capital to reach 10% of DHSC budget by 2035 from the current 6.5%, raising capital budgets by an estimated £8bn at no overall cost to the taxpayer.
- Develop a national investment strategy to aid decision-making.
- Deliver upon the 10-Year health plan to increase capital freedoms for foundation trusts, using under-utilised assets and converting them to day-to-day funding.
- Bringing NHS services to the high street.
- Establishing an NHS investment bank to enable trusts to borrow investment without relying on private debt.
- Encourage additional investment from third-party agreements for a range of developments, including key worker housing, clinical facilities, and retail.
Launching the report, the chief executive of NHS Providers, Daniel Elkeles, said: “The case for reform is urgent and compelling. Futureproofing the NHS estate is essential if we are to meet the ambitions of the 10-year health plan.
“That means treating capital investment not as an expense, but as a catalyst for improving productivity, stimulating innovation, and generating better outcomes for patients.
“It means unlocking progress that is blocked by dysfunctional treasury and government departmental rules.
“There is a really important and helpful message for the chancellor here.
“This is that rarest of things – a win-win-win – offering the prospect of reduced waiting times, increased economic growth, and more housing for key workers.
“Trusts are ready to play their part. We urge the government to match their ambition.”
Stephen Farrington-Bell, economics and investment strategy expert at PA Consulting, said: “The NHS stands at a pivotal moment. To deliver for the British people, the NHS needs to become more productive, efficient, and effective – and investment is critical to this.
“This paper sets out both the scale of the challenge and the scale of the opportunity, drawing on discussions with NHS trusts and foundation trusts. The exciting part is what can be achieved when we consider the total power of NHS spending in the round – and how it can be amplified by working with other parts of government and society to make a real difference.
“Critically, we have focused on how this can be done within the current spending constraints set by the government – this is not about spending more money, it is about having the freedom to spend money better to benefit patients.”
The NHS Confederation responds to the report
Responding to a new NHS Providers report on capital funding and NHS productivity, Matthew Taylor, chief executive of the NHS Confederation, said:
“More than a decade of being starved of capital investment has left the NHS estate in a dilapidated condition, with health service staff often having to work in crumbling buildings and use old or outdated equipment. This can put patient safety at risk and hamper productivity.
“We support the recommendations of this report to tilt spending toward capital investment and to give foundation trusts the freedom to recycle under-utilised capital assets to reinvest in modern estate and equipment. We have also been calling on the government to allow private capital investment into more parts of the NHS – including the acute sector – to build new facilities.
“However, it is also important that capital investment continues to flow into primary and community care as part of achieving the government’s ambitions to move care closer to people’s homes and provide more preventative interventions.”
