The NHS at 70: What It Means For Construction

On 5 July 1948, the NHS was founded by the then Labour Health Secretary, Aneurin Bevan, at Park Hospital in Greater Manchester. Over the last 70 years, the NHS has transformed the health and wellbeing of the nation. It has become an example to the world of how a system can achieve equality in care and treatment, regardless of income.

In its 70thyear, the world’s largest publicly-funded health service is strained by an aging population, public expectation, rising costs and a shortage of funding. What does this mean for construction within the health sector?

PFIs in Healthcare

Since 1992, Private Finance initiative (PFI) deals were chosen by both the Conservative and Labour governments in an attempt to ease the pressure. Prior to PFIs, the Government would use tax money or borrow from the bond market to fund projects, which would mean a completed hospital would be owned by the public sector.

However, the introduction of PFI deals meant that the Government can now pass responsibility of the project over to builders and/or the contractor. Those commissioned would then be expected to secure their own funding through the bond market and then oversee the build and ongoing maintenance. The theory being that, if construction professionals are responsible for ongoing costs, they are more likely to ensure it is built to a high standard.

Following its completion, the state then effectively enters into a lease agreement with them, or the management company who has purchased the contract, to use the hospital.

The pros and cons of PFIs have been widely covered, including The National Audit Office and the current Labour voicing their thoughts that PFIs don’t offer value to the tax payer. Furthermore, it is speculated that they can hinder job stability, existing capital projects and the operation of the NHS.

The collapse of Carillion certainly did the PFI framework no favours as it highlighted existing concerns over outsourcing and contracting, which has left many NHS capital projects unfinished or delayed.

We now face a political battle over PFIs in health sector construction as some large companies reportedly made pre-tax profits of £831m over the past six years under the PFI scheme, and are estimated to make almost £1bn more over the next five years. Whilst these huge profits are promised to boost our economy, the counter argument is that, those profits could have been used to fund patient care at a time when our NHS is short of vital funding. Some reports state that there are NHS hospitals that are struggling to make the ongoing payments to the private companies who own them, and are concerned about the ability to pay for essential materials, such as sutures.

Last Five Years

There has been major investment in construction and development of healthcare facilities, with many replacements of hospitals around the country. Despite the demand, the scale of new build projects has declined, with work being concentrated on less-costly refurbishments. These primarily focus on improvements with energy efficiency and carbon reduction on existing NHS facilities to meet ongoing targets.

The Government has now shifted its investment from the acute sector to primary care facilities, mental health centres and dementia care units with many smaller ProCure21 projects ongoing.

Health Sector Construction Forecast

Last year an estimated £5.7bn worth of healthcare projects to 2020 and beyond. Currently there’s said to be around 600 individual health projects under almost 100 schemes and 10 large NHS-led capital programmes as well as smaller ProCure21 projects.

An AMA Research documentestimated the outlook for health construction output will remain steady, with annual rates of growth of 3-5% currently forecast to 2021. The forecast is based upon the focus of delivery of local services, but project output will vary based on regional demand for key health services.

The NHS at 70 and beyond

No system is perfect but, as recognised by the Commonwealth Fund in 2017, the NHS is an incredible healthcare system. Figures also prove that the NHS has had the greatest decline in mortality rates, demonstrates high levels of care, is very affordable, and spends far less than many other countries. And yet, all this is achieved with fewer physicians and beds per 1000 patients than other systems.

Our doctors, nurses, and other care providers work hard to support us and meet our needs, despite the various challenges they face, not just with funding. If we want to see our NHS survive another 70 years or more, the service needs to be supported. We need to vote for better funding schemes and champion those who will fight for the NHS’ future. For the NHS’ 70thbirthday, we should take time to consider how truly lucky we are to have it and where we would be without it.

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