Alternative medicine

The healthcare reforms announced this week (page 10) are going to cause consternation in the construction industry. Andrew Lansley, the health secretary, is planning to give GPs control over £80bn of healthcare spending, abolish primary care trusts and allow NHS foundation hospitals to leave the state sector. As bombshells go, this doesn’t have the megatonnage that scrapping the £55bn Building Schools for the Future scheme did. All the same, if we include the PFI, about £4bn a year of capital spending is going be affected, and while surprised doctors work out how to buy buildings, there is bound to be a slowdown in spending. This is going to be as popular as a hernia, particularly as the threat of a double-dip recession is becoming increasingly worrisome (pages 12-13). But as with all radical change, it could bring new opportunities in the longer term.

What we do know is that by 2013, primary care trusts and strategic health authorities will have been phased out and consortiums of GPs will be legally responsible for commissioning services across their regions. Government spending is likely to fall in real terms and hospitals will themselves be forced to be more enterprising. On the consortiums, we’re not talking about a few go-getting practices clubbing together - they’ll be huge organisations that operate over whole counties. More generally, we know that healthcare provision will continue along the path it has already taken, for example by integrating with other community services that promote wellbeing. Authorities will be looking for efficiencies that can be delivered in new buildings - and they’ll be looking to attract private funding based on guaranteed revenue streams.

On the hospital building front, it’s clear that the days of the £1bn PFI teaching hospital are gone. Hospital projects were already under Treasury review, and a £450m scheme in Hartlepool has been scrapped. As with the school renewal programme, we can expect to see the focus shift to remodelling and repairing. Once the market picks up, hospitals will no doubt be looking to sell assets such as land to fund investment. If they gain foundation status - as the government wants most to do - they will be able to raise capital themselves. They’ll also be allowed to fail - so we can expect them to look more carefully at the financial sustainability of any new building work.

So we know a little about the new structures and the impact they may have on demand. But what about the practicalities of procurement? Who will reconfigure services as they shift from acute facilities to the community - currently the job of the PCTs? How will GPs who have previously thought on a smaller scale get to grips with holding vast budgets, and will they have the expertise to spend their money wisely? Will the government really be able to cast aside the PFI? What is the future for the Procure 21 framework, which has just been reconfigured towards smaller scale repair and maintenance work? Those are just a few sample questions; there are many more.

As we said last week about schools, the fact that there is less money to spend means the pressure is all the greater to ensure that procurement is efficient. Hospitals and healthcare buildings are complicated to commission and difficult to design and build. That means that the reservoir of knowledge that has been built up by Procure 21 should be preserved. It hasn’t been perfect, but it deserves to survive - and it could even extend its remit to advising the GPs consortiums, which will need all the help they can get. With so much else changing, the need for a body to provide solid client advice - when we do actually start building health projects again - is downright essential.

Denise Chevin, editor