A new report by the Health Foundation concludes that a short-termist approach has resulted in years of declining and inadequate capital spending for the NHS in England, risking patient care and staff productivity.

The independent charity also warns that an ageing infrastructure, together with a substantial and growing repairs backlog, is likely to undermine ambitions to transform the health service, including plans to improve cancer survival and make the NHS a world-leader in technology-driven care.

The Department of Health and Social Care’s (DHSC) capital budget is used to fund long-term investments in the NHS such as new buildings, equipment and IT, and also pays for maintenance and research & development.

But the capital budget has declined in real terms over the last eight years. As a result, NHS trusts in England have seen a 21% reduction in their capital funding over this period. The fall is mostly explained by transfers of money for long-term capital investment by the DHSC over the last five years, to cover the growing day-to-day cost of running the NHS. This year alone, the transfer amounts to £500 million of cancelled or postponed capital investment.

The new analysis also reveals that the UK spends about half the share of GDP on capital investment in the health service compared to similar countries, with the share having fallen significantly since 2009. While capital to revenue transfers have reduced the capital budget, this reduction only accounts for a small portion of the UK’s low capital spending by international standards. The Health Foundation says that an extra £3.5 billion a year would be needed to bring capital spending in England up to the OECD average. It cautions that failing to outline a long-term funding settlement for capital could further impact patient care in the future.

The report argues that the DHSC’s vision for a world-leading tech and data-driven health service is unrealistic when capital investment is much lower than in comparable countries, and underfunding over the years has left the NHS with an inadequate and ageing IT infrastructure. While IT investment has increased, it still makes less than 5% of the total value of NHS capital.

Health Foundation-funded research by Health Services Management Centre (HSMC) at the University of Birmingham, referenced in the report, interviewed directors and managers at NHS trusts, revealing serious concerns that spending restrictions are impacting service efficiency, and in several cases, the quality of patient care. The research highlights the impact of equipment shortages and failures, and reliance on ageing diagnostic equipment.

The UK currently lags behind other countries for cancer survival and the recently published NHS Long Term Plan notes the urgent need to improve early diagnosis. But low levels of capital spending have meant the UK hasn’t been able to invest in new equipment such as CT and MRI scanners, and now has the lowest number of both CT and MRI scanners per capita among comparable countries – less than a third of those in Germany. The Health Foundation estimates that bringing the UK up to the average would require around £1.5 billion of extra capital spending.

The report authors also warn that the lack of capital funding is storing up problems for the future in the form of a maintenance backlog across the service in England, which has been rising since 2013/14 and is now valued at over £6 billion. Over half of this is made up of ‘high’ and ‘significant’ risk maintenance, the two highest risk categories. The total backlog is now larger than the entire annual DHSC capital budget, posing an ongoing risk to the quality and safety of patient care.

Anita Charlesworth, Director of Research and Economics at the Health Foundation, said:

‘Capital investment is not a nice-to-have – failing to carry out repairs and invest in modern equipment and technology puts at risk the quality of patient care. It will also undermine the NHS’s ability to improve and transform care in line with the NHS Long Term Plan.

‘Just bringing capital funding for the health service in England up to the OECD average would require around £3.5 billion extra next year, rising to £4.1billion by 2023/24.’

NHS directors interviewed as part of the Health Foundation-funded research by the University of Birmingham, shared their experiences and concerns around the lack of capital investment.

One finance director at an acute NHS trust said:

‘The age of equipment and the quality of the estate, definitely impacts the care that can be delivered. It certainly impacts on the productivity and efficiency where, because we haven’t got enough endoscopy rooms and things, we have to run lots of single sex [patient] lists. There are lots of things like that that are impacted.’

On the subject of diagnostic equipment, a finance director at an acute NHS trust said:

‘We would have equipment that we weren’t replacing but was so old that we simply couldn’t get spare parts for it. You know, nuclear medicine machines where we would be machining parts to make them. And what that means is you don’t get the same accuracy, you don’t get the same resolution out of those machines, whether they be imaging or surgical, as you would with modern instruments so your quality of care outcomes aren’t as good as they could be.’

Highlighting the practical impact of the backlog, an estates director at an NHS ambulance trust said:

‘My immediate backlog maintenance risks for the high and significant risks are higher than £1 million but if I just tackle them I’m still not going to have a fit for purpose estate because just tackling the high and significant risk items doesn’t do other things like, you know, windows that are rotten and roofs that are starting to… It feels like you are constantly playing catch-up.’

Read University of Birmingham’s research paper, Restricted capital spending in the English NHS: a qualitative enquiry and analysis of implications, here

Media contact

Simon Perry
Simon.Perry@health.org.uk
020 7257 2093

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