The UK Government’s 2025 Budget confirmed plans for 250 neighbourhood health centres, with 120 expected to be operational by 2030, as part of a major expansion of community healthcare infrastructure.
Private finance is expected to play a central role in the delivery of the NHS’s neighbourhood health centres (NHCs), which will bring together GP services with diagnostics, mental health, physiotherapy and social care.
While around 40% of neighbourhood health centres are expected to be delivered through refurbishment or repurposing of existing buildings, the remaining 60% are expected to be new builds, where private finance is anticipated to fund the majority of schemes.
The Government estimates suggest that around 80% of new-build schemes could be funded through a public-private partnership (PPP)-type structure.
Craig Elder, a PFI and PPP lawyer at Browne Jacobson, told Building Better Healthcare that historic PFI models had significant shortcomings.
“Earlier PFI contracts were often inflexible and lacked transparency, with very long procurement timelines,” said Elder. “In some cases, early contracts did not include adequate provisions for refinancing or handover, which led to public criticism.”
Elder said that while later iterations of PFI addressed some of these issues, the political legacy of the model remains a key consideration for any new partnership approach.
“Any new model will have to show appropriate sensitivity,” Elder said. “Proposals that are seen as too close to historic PFI are likely to face resistance.”
Lessons from PFI and NHS LIFT
Private sector involvement in NHS infrastructure is well established, with PFI and NHS LIFT models used extensively during the 2000s to deliver both acute and community healthcare facilities.
Construction firm Willmott Dixon, which has delivered more than 30 community healthcare facilities, including 15 through the NHS LIFT programme, said experience from those schemes is shaping current thinking around neighbourhood health centres.
“Where responsibilities, payment mechanisms and risk allocation were clear and balanced, projects generally performed well over their lifecycle,” Anastasia Chrysafi, National Healthcare Lead at Willmott Dixon told Building Better Healthcare. “Where they were not, challenges often emerged later, particularly around flexibility, maintenance standards and handback.”
The contractor said lessons from NHS LIFT have reinforced the importance of early clarity in employer’s requirements and governance, alongside a move away from bespoke buildings towards more standardised approaches.
“Future PPP approaches must be more agile, with fair and transparent risk sharing, clearer payment structures, and a stronger partnership ethos across the life of the asset,” said Chrysafi.
Project Wings and emerging PPP models
According to Carly Caton, a commercial healthcare lawyer at Browne Jacobson, the government is currently exploring delivery options for neighbourhood health centres through Project Wings, a market engagement exercise led by the Department of Health and Social Care.
“There isn’t a blueprint yet,” Caton told Building Better Healthcare. “But any model is likely to borrow lessons from past PFIs and be smaller in scale than acute hospital projects.”
Caton said the intention is to develop structures that are clearer and more flexible than historic arrangements, with a focus on repeatability and proportionate risk allocation.
Caton said that balanced risk allocation will be critical to delivering neighbourhood health centres at scale.
Design and construction risk is expected to sit largely with the private sector, while demand risk, service change and wider policy risk are likely to remain with the NHS.
Clear handback requirements, transparent reporting and regular asset condition reviews are also seen as essential to avoiding some of the challenges associated with legacy PFI contracts.
NHC schemes in progress and next steps
While no new-build neighbourhood health centres have yet been formally procured under the national programme, Willmott Dixon said it is currently delivering several community healthcare projects aligned with the NHC model.
These include a health-on-the-high-street facility in Barnsley, a community health centre in Wales, and Weybridge Health Centre, which is currently on site.
The contractor is also engaged in market engagement with the National Infrastructure and Service Transformation Authority (NISTA) and the Department of Health and Social Care as the delivery model for NHCs continues to develop.
“The scale of the [NHC] programme and the mix of new build and refurbishment create an opportunity to adopt simpler structures that combine public capital with private investment where it adds value, rather than relying on long, rigid contracts,” said Chrysafi.
Procurement of new-build neighbourhood health centres is expected to follow later in 2026, although timescales remain subject to further policy development.