Leader: Waiting in the wings

Who would disagree that the NHS is “going broke and not working”? The British media pumps out a steady stream of stories detailing the human cost of cuts to patient services – but these words were part of a tweet from US president Donald Trump disparaging his political opponents’ policy of universal healthcare and triggering a backlash in defence of our cherished, albeit cash-strapped, health service. For goodness’ sake, it almost united Jeremy Hunt and Jeremy Corbyn in the Twittersphere … well, almost.

It was all sparked by last weekend’s demonstration in London, called NHS In Crisis: Fix It Now, where thousands of people marched – and after which, prematurely as it turned out, many supporters bemoaned it being under-reported by the mainstream media. What a difference a tweet makes.

The facts are these: the maintenance backlog has grown to £5.5bn this year, with £1bn of “high-risk repairs” urgently needed to avoid disruption to clinical services

The name of the march certainly reflects the feeling that the NHS is in the midst of yet another winter crisis – some 55,000 non-urgent operations have been cancelled over the past two months as part of a plan to cope with a winter surge in patient numbers. One trust in the south of England has taken matters out of its own hands and is now paying a hospital in Calais to perform surgery on some of its patients. The fact that a French hospital can offer a hip replacement to a UK resident with just a four-week waiting time may not be a comfort to those pro-Brexit politicians who emblazoned the £350m-a-week pledge for the NHS across their battle bus during the referendum campaign.

And just last month A&E doctors warned the prime minister of overcrowding in emergency departments and said patients were dying in hospital corridors. Clearly, a fix is needed.

One place to start is the NHS estate, which has suffered from regular raids on capital funding to keep frontline services ticking over. In a disappointing display of short-termism the Department of Health and Social Care (DHSC) transferred £1.2bn of its £5.8bn budget for capital projects to fund the day-to-day running of NHS trusts last year. The National Audit Office condemned the trend, which it said has “not provided the stable platform intended from which to transform services”.

Cue, Project Phoenix – a private finance model worth £5bn that we reported on almost a year ago and tipped to be the next big thing.

The facts are these: the maintenance backlog has grown to £5.5bn this year, with £1bn of “high-risk repairs” urgently needed to avoid disruption to clinical services. The scale of the problem has been known about for some time: last spring Sir Robert Naylor published his report recommending a massive cash injection alongside a more strategic approach to asset management and investment.

In the autumn Budget the chancellor seemed to heed the call and pledged £10bn of additional capital funding over the course of the parliament. And just last month the government’s official response to the Naylor review confirmed £3.9bn of the extra cash would be through direct government funding, £3.3bn from land sales and the rest from private finance. Some of this money is starting to be allocated to projects, but the private finance element is proving awkward.

The very idea of private finance in the context of the NHS is a toxic one at the moment. DHSC used PFI to generate £13bn of capital investment over the years – more than any other government department. But now Carillion’s collapse and the knock-on effect on hospital projects such as the Royal Liverpool University hospital, where work may not resume until the end of the year, is very much linked in the public imagination to PFI. The British Medical Association said Carillion’s fate “raised serious questions about PFI deals”.

Of course, the use of PFI and PF2 has been on the wane for some years now, but meanwhile the need for investment in our social infrastructure is only increasing. The sheer scale of the NHS funding gap means that private finance of some kind is surely a necessity. Cue, Project Phoenix – a private finance model worth £5bn that we reported on almost a year ago and tipped to be the next big thing. One crucial difference between this initiative and PFI is that the contractor does not finance the whole project; the public sector retains an equity stake.

So, one year on, what’s happened? Well, not a lot. It is claimed that the initiative was meant to launch last October but it’s still awaiting sign-off from the Treasury. Concerns over the tendering mechanisms could be behind the launch now moving to the summer. Although the official line is that there is no delay, it would be understandable for the Treasury to want its ducks in a row first – nobody wants another drawn-out legal challenge from an aggrieved bidder. Still, the urgency of the situation needs underlining. Capital funding to maintain and build healthcare facilities is not a “nice to have”; it is fundamental to a fully functioning NHS that we all want to be proud of. 

This week's poll: Is there still a place for private finance in the NHS?

— Building News (@BuildingNews) February 9, 2018