21 July 2006
The NHS must invest in new buildings but it should turn its back on large hospitals, a think tank said this week.
Since 1997, the English health service has attracted more than £7bn of private finance to replace outdated hospitals. But centre-right think tank Reform said the resultant large units did not fit the changing face of NHS provision.
In a report, Investment in the NHS – facing up to the reform agenda, it said more patients would be treated in the community, while payment by results and patient choice made it less likely that larger units would be able to generate enough income to support payments under the private finance initiative.
Recently, the Department of Health and the Treasury have reviewed the affordability of PFI schemes but have still given the go-ahead to 'super' hospitals worth more than £1.6bn at University Hospital Birmingham and Barts and The London trusts (albeit with some cuts in the latter case).
However, the report's author Nick Bosanquet, who is professor of health policy at Imperial College London, said more, small units were needed. Much of the funding would continue to come from private sources and NHS or third party providers (such as private healthcare firms) could rent or lease the facilities.
NHS managers had underspent their capital budgets in the last two years (£1.2bn in 2005/06 and £06bn in 2004/05) – this money could help build new community-based units that would catalyse the hoped-for switch to more local and flexible NHS services.
Bosanquet said managers appeared to be 'paralysed' when it came to investing in local facilities. 'The actual causes of the unwillingness to invest are deficits, partly due to an overexpansion of capital projects since 1999/2000; a lack of financial information and knowledge of costs; and crude attempts by the Department to retrench on spending,' he said.
The Department said PFI schemes were checked to ensure they were affordable and appropriate. A spokesman also pointed out it had a number of schemes to fund local development, including NHS Lift (Local Improvement Finance Trust), and it had recently promised £750m over five years for new community hospitals and health centres.
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