Inflation casts doubt over pledge to build 40 hospitals

The government may have to row back on its pledge to build 40 new hospitals by 2030 in the face of a pending black hole in public finances.

According to the Financial Times, officials are poring over planned projects to determine which could potentially be shelved in the wake of an expected shortfall of almost £2bn in the NHS capital budget over the next five years.

The run-up to the Budget on 15 March has seen “difficult discussions” about how the £3.7bn New Hospital Programme – which was at the core of Boris Johnson’s election manifesto – would be funded, the paper reported.

Capital budgets in the Department of Health and Social Care are expected to flatline in cash terms after the next two years, leaving them vulnerable to soaring inflation.

Plans were announced in October 2020 to build the hospitals as part of a scheme to upgrade and expand NHS services, including the creation of eight brand new facilities.

Contractors were invited to a flagship event last September to hear about opportunities to work on the scheme.

Chancellor Jeremy Hunt also confirmed his commitment to the programme in November’s Autumn Statement as part of a wider commitment to infrastructure spending that would see capital budgets increase for the next two years and maintained in cash terms for the following three years.

But now priority is expected to be given to hospitals that contain planks made from reinforced autoclaved aerated concrete (RAAC), which are at risk of collapse as the material reaches the end of its expected 30-year lifespan.

The department confirmed it had received expressions of interest under the scheme from all five hospitals that will need to be entirely replaced as a result of RAAC.

In a statement, it said its overall capital spending was set to rise between now and 2024/25 and the budget for the hospital building programme had increased from £580m in 2021/22 to £1.6bn in 2024/25.

“We are investing £3.7bn for the first four years of the New Hospital Programme and remain committed to the delivery of all schemes as part of the biggest hospital building programme in a generation,” said a spokesperson.

“We are developing a national approach to constructing new hospitals so schemes can be built more rapidly and ensure value for money and we continue to work closely with all trusts on their plans.”