Source · Select Committees · Public Accounts Committee
Recommendation 32
32
Accepted
New Hospital Programme, initially \
Conclusion
The Government’s announcement of the New Hospital Programme in October 2020 stated that the 40 listed schemes (cohorts 1 to 4) would be “fully funded”. However, in the 2020 Spending Review, HM Treasury only allocated capital funding of £3.7 billion to the NHP for the four years up to 202425; this did not amount to full funding for the 40 new hospitals and the eight pre-existing schemes. There was no indication at that point of what further money it would give up to 2030. In March 2023, HM Treasury finally agreed a funding envelope and scope for NHP up to 2030–31 (subject to future spending reviews). According to this, the maximum NHP could expect to spend on the programme from 2025–26 to 203031 was £18.5 billion.71
Government Response Summary
The government agrees that NHP plans and costs should be realistic and deliverable, stating it has provided clarity on funding and is developing a third version of the programme business case for approval by May 2024 to confirm funding for schemes, including those completing after 2030.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: May 2024 6.2 The government agrees that the NHP’s programme plan and costs should be realistic and deliverable. In May 2023, the government gave greater clarity on programme scope and funding in its announcement confirming that the NHP is expected to be backed by over £20billion of investment. The department has provided all schemes with an indicative funding envelope on which they can base their programme plans. All trusts will still need to go through business case approval processes. As outlined in response to recommendation 5, the NHP is keeping assumptions on size of future hospitals under constant review. 6.3 The NHP also agrees that it should continue to engage with the construction industry to understand and manage likely capacity constraints and is already implementing an extensive market engagement strategy to this effect. The NHP held a market engagement event in November 2023, which updated industry on the current status of the programme and future plans and was attended by over 300 supplier or business organisations across eight primary market areas. 6.4 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.