Wes Streeting’s January announcement brought some welcome clarity to a New Hospital Programme (NHP) which has been working hard to establish credibility in a nervous market. Whilst there are undoubtedly winners and losers amongst the Trusts desperate for NHP funding, there is now at least a triangulation between programme, cost and budget which looks credible for the first wave of projects.
The NHP now consists of three successive waves of investment, with each wave constituting a 5-year funding envelope building to a steady-state, £15bn / £3bn per annum rolling capital programme by 2030.
The programme looks to modernise UK construction methodologies and, by harnessing the benefits of Modern Methods of Construction (including Digital Construction), generating a step-change in productivity improvements. It will be underpinned by a transformational commercial model which will limit downside risks for suppliers and offer enhanced profitability for excellent performance.
More importantly, to give both the Treasury and major contractors confidence that there will be no repeat of the adversarial culture, ballooning costs and quality failures associated with a few of the major UK hospital builds delivered in recent years, the NHP is creating an Alliance culture and a programmatic approach to delivery. The NHP Hospital 2.0 Alliance will curate and develop a suite of repeatable designs, components and processes, ensuring both clinical and technical performance standards, whilst providing a fertile environment for the development of an industrialised, componentised approach to construction design and delivery.
Where does this leave us?
The procurement process to select main contractors for the framework has now begun, with an intention to start work in earnest on the highest priority projects during 2026. After a long and at times frustrating gestation, the combination of a Treasury-backed, credible Wave 1 budget with a vision for commercial and technical transformation for hospital building has stimulated not just interest, but excitement in a previously cautious and sceptical construction market.
So great news for Wave 1 Trusts, great news for a rejuvenated hospital building sector, but not such great news for those Trusts which had pinned their hopes on inclusion in the immediate programme.
The procurement process to select main contractors for the framework has now begun
Trusts like Leicester, for example, whose scheme of much-needed, multi-site redevelopment, which was originally a “HIP 1” project under Boris Johnson (to be completed by 2025), is not much changed from its failed procurement of 20 years ago. Now in NHP Wave 2, they must wait until 2030 before their scheme can progress. Meanwhile Imperial’s crumbling St Mary’s, Charing Cross and Hammersmith sites must all try to keep the lights on until Wave 3, with construction not starting before 2035.
But these Trusts are not exceptional. Trying to find ways to provide high quality care and acceptable workspaces amongst a decaying and, at times, dangerous physical environment has become the norm for the majority of NHS Acute Trusts.
The NHS estate has a gross internal floor area of 27.5 million sqm but has suffered from significant
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