THERE could be a shortfall of £15bn to build hospitals in the Government’s New Hospital Programme (NHP), raising questions over when the funding for cohort 4 schemes, including Basingstoke, will be agreed. 

The Gazette has launched a campaign calling on the Government to Build Our Hospital, after it was revealed that the project for Basingstoke is not included in the £22bn funding for the whole scheme.

Hampshire Hospitals NHS Foundation Trust (HHFT) has been told it has indicative funding of £700m to £900m for the project. However, the Department for Health and Social Care (DHSC) has said the £22bn funding for the NHP does not include hospitals in cohort 4 of the programme, which includes Basingstoke.

The building of a new Basingstoke hospital is delayed until the 2030s after the Government added seven new hospitals to the programme which have been given priority because they contain reinforced autoclave aerated concrete (RAAC) and pose a safety risk.

Here, we look at the funding issue in more detail, including a timeline of events and concerns raised in Parliament. 

March 2023

HM Treasury agrees indicative capital funding of £18.5bn for 2025-26 to 2030-31 for the New Hospital Programme (NHP). It previously confirmed £3.7bn in May 2022 for 2024-25.

Forecast costs for schemes in cohorts 1 and 2 increased by 41 per cent between 2020 and 2023. In 2020, NHP was allocated £2bn for cohort 1 schemes but by March 2023 their forecast cost had grown to £2.7bn. Similarly, the allocation for cohort 2 schemes was £916m in 2020 but forecast costs increased to £1.3bn by March 2023.

NHP has been planning for schemes in cohort 3 and later to use an innovative standardised hospital design - known as Hospital 2.0 - and modern methods of construction, to reduce costs and timescales and improve the quality of new hospitals.

It estimates that, by cohort 4, hospital construction will be 25 per cent cheaper and 20 per cent quicker compared with traditional approaches.

However, the National Audit Office reported that there is a risk that Hospital 2.0 will result in hospitals that are too small, and the design is not expected to be finished until 2024. 

May 2023

Former health secretary Steve Barclay announced that HHFT would receive £700m to £900m funding from the NHP.

The Government announces five RAAC schemes are joining the NHP and eight original schemes in cohort 4, including Basingstoke, will be delayed and completed after 2030.

July 2023

The National Audit Office published a report on the NHP describing progress as “slower than expected” and “poor value for money”.

It said the NHP will “no longer construct 40 new hospitals by 2030” and that eight cohort 4 hospitals, including Basingstoke, will be delayed until the 2030s.

The National Audit Office said it had taken DHSC “longer than it expected to secure a clear indication of the capital funding available for NHP from 2025-26 onwards”.

The report said HM Treasury considered it “impossible” to set an indicative budget for later years “due to issues with the scope of the programme, delivery capacity and the programme plan”.

September 2023

The Government’s Public Accounts Committee heard oral evidence from the NHP.

Chair of the committee, Dame Meg Hillier, raised concerns about funding saying: “With the money from the Treasury dribbling out in small amounts, it is not like there is a long-term, certain funding plan yet.”

Sir Geoffrey Clifton-Brown, the Conservative MP for the Cotswolds who is on the committee, asked about funding for the programme.

He pointed out that the costs needed to build all the hospitals in the programme add up to £37.95bn, which is £15bn short of the total £22.2bn funds allocated for the scheme.

“So, can this programme be built? Where is the gap coming from?” he asked, adding: “It seems to me that there is a massive black hole in terms of getting these cohorts done, isn’t there?”

Shona Dunn, second permanent secretary for DHSC, responded, saying there would be a “rolling programme going forward”, adding that they expect some hospitals to complete after 2030 and, while the funding will include “early works” for these schemes, “it is not expected to include the full cost of those that go beyond 2030.”

Natalie Forrest, the senior responsible owner for the NHP, who has since reportedly stepped down, continued: “You are quite right that the current funding up to 2030 does not include those hospitals that will complete beyond 2030.”

Sir Geoffrey added: “It looks as though there is a huge black hole in the funding allocated. What discussions are you having with the Treasury on this? At this moment, as you sit here, where do you think the final funding figure is to get all the hospitals in the programme built?”

Ms Dunn replied: “Obviously, we have had a lot of discussion with the Treasury over some considerable time. The envelope that was announced in May is one that we think we can work with.”

November 2023

The PAC published a report in November 2023 saying it had "no confidence" that the government will deliver on its promise and raised fears over funding.

It said “substantially more funding” is required from the Treasury to build the eight hospitals in cohort 4 that have been delayed and recommended that HM Treasury should "agree explicitly in writing" whether the pre-2030 costs of cohort 4 schemes are to be met from the current agreed funding.

This has not yet happened.

February 2024

The Government responded to the PAC report to say it agrees with the findings regarding cohort 4 hospitals and the recommendation.

It said the NHP is constantly reviewing assumptions on the size of future hospitals, adding: “The NHP is developing a third version of the programme business case with different options, as is usual practice, with a view to securing approval through the government’s Major Projects Review Group by May 2024 and confirming funding through future Spending Review processes.

“Once agreed with HM Treasury, the intention is for the programme business case to include a specific amount of proposed funding for the pre-2030 costs of the eight schemes expected to complete after 2030. The government remains committed to all schemes in the NHP, including those expected to complete after 2030.”

Natalie Forrest sent a letter to chief executive of Hampshire Hospitals NHS Foundation Trust, Alex Whitfield, offering reassurance over funding for a new hospital.

She said “we would not have supported a move to public consultation if we were not confident that funding would be available”. Ms Forrest has since reportedly stepped down from leading the NHP.

An update on the NHP published in the House of Commons Library on February 21 said: "With the delivery of eight projects now delayed until after 2030, additional funding will be needed at a later date."

A statement from HHFT on the funding said questions around funding need to be answered by the DHSC, but confirmed that it has been given some "enabling funds" for the programme.

It said the main build will be covered by the post-2030 allocation, adding: "We do not have any further information around the timings of future government spending reviews."

The statement continued that HHFT is "pleased" it can share the indicative funding for a new Basingstoke hospital, adding: "It represents a significant investment in Hampshire hospitals and health services and gives confidence that sufficient funds are allocated for our programme."

The Gazette spoke to Basingstoke MP Maria Miller at her community chat event where she confirmed that the funding for Basingstoke is "beyond the next spending review" and there is a "rolling programme" for funding for the NHP. She was unable to say when the funds for cohort 4 schemes will be agreed.