Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Acknowledged
Safeguard planned capital investment from diversion to meet day-to-day spending needs.
Conclusion
The raiding of capital budgets in the recent past is an underlying cause of the estates crisis the NHS is now in. As this Committee has highlighted several times, DHSC has for some years focused on short-term financial viability in ways that failed to consider the long-term consequences for services and patient care. DHSC diverted £4.3 billion of NHS capital funding from planned capital spending to day-to-day spending between 2014–15 and 2018–19; and by 2021–22 there was a record maintenance backlog of £10.2 billion. Under-investment in the estate has resulted in a situation that now requires urgent action. This includes but is not limited to the crisis with RAAC. Working in out-of-date buildings that have not been well maintained also makes it hard for the NHS to modernise and recover its performance to the standards required in the NHS Constitution, and is only likely to exacerbate problems in attracting and retaining staff. Recommendation 8: DHSC should not reduce planned capital investment to meet day-to-day spending needs in future; if officials were to consider doing this again we would expect the Permanent Secretary to write to Ministers explaining the likely real-life consequences of such a course of action. The New Hospital Programme 9 1 Progress in construction and developing new hospital design
Government Response Summary
The government agrees in principle not to reduce planned capital investment, but states it will continue to follow its usual processes for financial decisions, including switching capital budgets in exceptional circumstances, and will make considerations clear as part of Ministerial advice.
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Recommendation implemented The government recognises the importance of capital investment in the NHS and the role it plays in an effective and productive healthcare system. The department is providing the NHS with record amounts of capital, including £12 billion of operational capital between 2022- 23 and 2024-25 to address the most pressing priorities. The decision to switch capital budgets to revenue is only made in exceptional circumstances. When such switches are enacted, capital programmes with forecasted underspends are prioritised for a switch rather than proactively delaying programmes. The department also enacts some adjustments where, to meet the same programme aims, the currency of spend has changed from capital to revenue. Although the government agrees with the Committee’s recommendation in principle, it is right that the department regularly assesses its priorities so that budgets are targeted effectively. Therefore, the government suggests that the usual processes when advising Ministers of the impact of financial decisions, including switching of capital budgets, continue to be followed. The department will continue to make these considerations clear as part of Ministerial advice, with any switches then being approved by HM Treasury. Looking forward, the government is committed to providing more certainty for NHS capital through rolling programmes of investment in NHS infrastructure.