Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
With little contingency up to 2029–30, there is a risk that delays and cost overruns...
Recommendation
With little contingency up to 2029–30, there is a risk that delays and cost overruns in the early years will have knock on effects on subsequent hospital schemes. Although some of the early hospital schemes in the programme (known as ‘wave 0’) are open or due to complete soon, enabling works for many hospital schemes in the next wave (‘wave 1’) are yet to start. Wave 1 contains the first schemes to be built to the Hospital 2.0 design which will be more complex. The Hospital 2.0 design is novel and it is taking time to finalise. Wave 1 will include 16 more hospital schemes than anything delivered so far, with a planned spend of £8.9 billion from 2025–26 to 2029–30, compared to £720 million for schemes in wave 0. Despite these challenges, the Department has set aside very little contingency funding for 2025–26 to 2029–30, just 3% of total funding for the period. If the programme faces unexpected cost increases in the next few years, there is very little buffer to absorb them, and knock-on delays to subsequent hospital schemes are likely. recommendation The Department must closely monitor progress to ensure knock-on effects are managed effectively by: a. using an assessment of progress on the early schemes to re-estimate the hospital opening dates and costs for later schemes; and b. improving transparency by reporting publicly on progress and spending every year for each scheme, and explaining any significant variances and the consequences for the programme.
Government response summary AI-generated
The government agrees to closely monitor progress, explaining it uses benchmark data and forecasting to re-estimate schedules and costs, and regularly updates its integrated plan. It will improve transparency by providing regular updates in the NHP annual report, noting that annual spending is already published through existing processes.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Accepted
HM Government · verbatim extract
Accepted
The government agrees with the Committee’s recommendation. closely to ensure that any knock-on effects on subsequent schemes are managed effectively. It continues to assess the delivery of schemes in line with the Plan for Implementation, including any opportunities for acceleration of scheme timings. The Programme is using NHS benchmark data and industry standard Reference Class Forecasting to apply learning from previous NHS capital projects when developing Wave 1 schedules and cost estimates. The Programme's integrated plan is updated regularly to align programmatic and scheme specific activity and manage interdependencies between these. The department will be providing a regular update on progress through the NHP annual report. The government agrees with the Committee’s recommendation. progress and spending. As part of the Annual Reports and Accounts Process the department publishes annual spending, including annual public dividend capital payments to Trusts in the NHS. The NHP is the subject of significant publicly available scrutiny and reporting, including reports by the National Audit Office, Government Major Projects Portfolio (GMPP) dashboard, NISTA annual reports as well as through the work of the Committee The department intends to publish the first NHP annual report in summer 2026 which will report on progress and spending for the previous financial year, as set out in section 1.4. design might not benefit some patients or may add cost. in due course. design. 3.6 The government agrees with the Committee’s recommendation. 3.7 The department will commission an independent assessment of whether the benefits of the Hospital 2.0 design are being realised once the first fully Hospital 2.0 compliant hospitals are operational. This evaluation will assess whether the benefits set out in the Programme Business Case are being achieved in practice, including improvements in patient outcomes and experience, workforce wellbeing and productivity, safety, and operational efficiency. 3.8 Once hospitals built to the full Hospital 2.0 standard have been operational long enough for benefits to be measured, substantive impact evaluation can take place. The programme expects at the earliest this can take place between 12-24 months post opening. Based on current delivery schedules, as set out in the Plan for Implementation, the department expects to report independent impact evaluation findings from the end of the 2034–35 financial year. Learning will also be captured earlier through post-occupancy evaluation and scheme-level reviews, and lessons learnt implemented in subsequent waves. 3.9 The findings from the independent assessment will be reported through programme- level governance arrangements and will inform ongoing refinement of the Hospital 2.0 design to ensure the programme is maximising the benefits. will be finalised shortly, and the plans for each hospital will then be determined through each scheme’s Outline Business Case (OBC). NHP’s standardised Hospital 2.0 design supports flow by prioritising admission avoidance, improving clinical adjacencies, supporting infection control, improving bed utilisation, and allowing capacity to adapt. 4.5 The department will write to the Committee in Spring 2027, as schemes in Wave 1 progress through the OBC approval process, providing information on planned bed capacity, including how a scheme’s bed numbers reflect its Model of Care the expected demand and planned shift of care into the community.