The government’s plans to abolish NHS England and merge its functions back into the Department of Health and Social Care have added a new layer of risk to the multi-billion-pound New Hospital Programme, the National Audit Office has warned.
In an update on the programme, which was launched following a 2019 general election pledge by the Conservative Party, the public spending watchdog said senior staff have left and vacancies have become harder to fill following PM Keir Starmer’s decision to scrap NHS England.
The New Hospital Programme is a joint project between DHSC and NHS England that aims to drive savings through central procurement and the standardisation of hospital design. It currently comprises the delivery of 46 hospitals, five of which are already operational.
The NAO said that the announcement of plans to abolish NHS England had been followed by the resignation of “senior staff within NHSE who understood the programme and had been involved in key decisions”. It added that a recruitment freeze had led to delays and challenges hiring staff needed on the programme, while changes in responsibilities had slowed funding approvals and contracts being signed.
According to the NAO, as of November the programme had 138 vacancies out of a full complement of 357 – representing a vacancy rate of 39% for public-sector roles. The NAO’s 2023 snapshot of the programme said there was a vacancy rate of 31%.
“DHSC has rated the risk of vacancies leading to delays as ‘red’,” the latest update says. “DHSC recognises that this is a significant risk to the programme, but its ability to mitigate it is limited while future departmental structures are not yet settled.”
According to the report the recruitment issues have left “capability gaps” in digital and IT work, as well as in project delivery and legal roles.
The Johnson government’s original pledge for the New Hospital Programme was that it would deliver 40 new facilities by 2030 – a timescale described as “not a realistic goal” by the NAO in 2023.
Today’s NAO update follows a reset of the programme last year. It says completion of the programme is now not expected until 2045-46.
Among the 41 outstanding schemes, projects to replace seven hospitals built from crumble-prone reinforced autoclaved aerated concrete (RAAC) were expected to be prioritised and had been recommended for completion by 2030. The NAO now reports that they will not be completed until after 2032-33, meaning that the RAAC hospitals, with their structrual problems, will continue to be used for longer.
As the New Hospital Programme’s timescale has extended, so has its anticipated cost. The NAO said total expenditure is now projected to be £60bn, of which £56bn in capital funding is estimated to be required – a £33.8bn increase on the capital funding proposed in 2023.
According to the report, delays to the delivery of new facilities will mean hospital trusts face additional costs relating to maintaining current buildings for longer. It said DHSC estimated those costs at between £100m and £140m a year.
The NAO said last year’s reset had put DHSC’s plan to build new hospitals on a “more stable, long-term footing”, and that standardising construction of hospitals had the potential to reduce construction costs and deliver economies of scale over time.
However it said that it would be important for DHSC to take the time needed to get the design for new hospitals right, plan the programme well and then execute the plan efficiently. The standardised design was originally due to be finalised in 2023. The NAO said the health department now “expects to complete and fully assure the design” in April this year.
NAO head Gareth Davies said the latest update showed positive steps had been taken with the programme.
“The reset of the New Hospital Programme gives the department a firmer platform to deliver long‑term improvements, and its ambition to transform hospital infrastructure has real potential provided designs are rigorously tested and programme delivery is well managed,” he said.
Sir Geoffrey Clifton-Brown, chair of parliament’s Public Accounts Committee, saluted the reset programme’s “more realistic” cost estimates and schedule expectations, but expressed concerns about delays to replacing hospitals built from RAAC.
He said that slippage with those projects would “pose significant clinical and cost risks” that needed to be addressed urgently.
“It is imperative that DHSC maintains rigorous oversight over the programme so that patients and clinicians do not wait even longer for their new hospitals to be completed,” he said.
DHSC said the NAO’s depiction of the New Hospital Programme’s cost increase failed to take account of the inclusion of additional schemes.
“'The NAO's interpretation of the changing costs of the scheme is mistaken, as this does not include the additional nine hospitals we are now building,” a spokesperson said.
However, the spokesperson said the department supported the NAO’s over-arching evaluation of the programme.
“This report demonstrates this government has put the New Hospital Programme on a stable long-term footing after inheriting a plan that was unfunded and undeliverable,” they said.
“We’ve confirmed a sustainable funding plan and an achievable timetable to deliver all schemes in the programme. We are now getting on with building these much-needed facilities as quickly as possible.”
DHSC said the NHS is set to spend £1.6bn over the next four years to remove and mitigate RAAC to protect patient and staff safety and deliver a “health service fit for the future”.