Acute lack of investment is starving healthcare estates

The NHS Estate comprises around 25 million square metres across the country and is the third biggest cost to the NHS after staff and medicines.

Unfortunately, cumulative years of budget restrictions and a hard-nosed emphasis on cutting costs have concentrated budget holders’ minds on the here and now, reacting to problems, rather than anticipating them.

As a result, the NHS now has a staggering backlog maintenance bill of nearly £5m. £776m of this relates to infrastructure that powers, heats, cools or controls critical and vulnerable clinical environments, such as operating theatres, pharmacy labs and intensive care areas (ERIC, 2015-16). This is a 70 per cent increase on the critical backlog from the year before.

The dramatic change points to a worrying approach of avoiding investment to help patch up increasingly large NHS deficits.

As Chris Hopson, chief executive of NHS Providers, said recently: “There is now a clear and widening gap between what the NHS is required to deliver and the funding available. This will only get worse as overall funding increases drop from next year.

”In reality, we have only just kept our heads above water because we have transferred the investment intended to fund long-term transformation into reducing the deficit that the majority of NHS trusts face.”

Clearly, something needs to change. Buildings and the plants that power them may not be sexy, but they are integral to delivering first class healthcare and reducing budget deficits.

This is not just about eliminating waste, it’s about ensuring buildings are fit for purpose, safe and appropriate for the future of healthcare delivery.

In an age of smart phones, patients no longer want to queue outside GP offices, wait on hold to make appointments or travel long distances for their appointments when they could simply hold a teleconference from the comfort of their own homes. This has critical and valuable implications for how the NHS operates clinically, but also operationally.

This is not just about eliminating waste, it’s about ensuring buildings are fit for purpose, safe and appropriate for the future of healthcare delivery.

Harnessing this technology is key to investment decisions. “Big data” can tell us now how people use healthcare buildings, help identify bottlenecks and areas that are under-utilised, where we are wasting energy and resources and encourage redesign and rationalisation.

On top of this, trusts must be empowered to make investments in their estates to be able to release funds and reduce deficits.

Lord Carter, in his report on Productivity in the NHS said:

“…if all trusts could move to the median benchmark [for energy] then £36m could be saved. This saving could increase to as much as £125m if trusts were able to invest in energy saving schemes such as LED lighting, combined heat and power units, and smart energy management systems.”

Some trusts are already delivering energy savings well above Carter’s expectations. Guy’s and St Thomas’ Foundation Trust in London is investing in its estate to deliver guaranteed savings through an energy performance contract (EPC). A £1m lighting project, replacement of motors and fans, and upgrading of building management system (BMS) outstations will not just deliver an annual energy saving of £1m – it will also take £1m off the trust’s critical backlog maintenance bill.

Kevin Ward, deputy head of estates at Northern Devon Healthcare Trust is project managing an EPC that will shortly complete installation. Through this project, they have improved efficiency and resilience through the installation of solar panels across four sites, including three community sites with biomass boilers, as well as a large CHP engine at Northern Devon District Hospital. LED lighting upgrades, building management system (BMS) upgrades and heat exchangers have also been built into their project.

Iain Roy, Director of Facilities and Project Lead said of the EPC programme, “Not only do we have a more reliable and efficient addition to the infrastructure for each site, but when all the technologies have been installed we will have more resilient systems and expect to be saving over 25 per cent annually on our energy costs.”

Other trusts, such as Worcestershire Acute Hospitals Trust, are also acting. Ray Cochrane, head of estates, said:

“Worcestershire Acute Hospitals Trust is using the EPC model to drive innovative solutions to address critical infrastructure and increase resilience. The trust will also save a great deal of money on our energy bills and reduce our carbon impact.”

In short, understanding our estates through technology and investing in appropriate and optimised building infrastructure is a fundamental task facing the NHS in the coming years.

Coming up with the cash is often perceived as a barrier to moving forward with projects, but several mechanisms are available for NHS trusts, even those without foundation trust status. Salix continues to offer zero interest finance for projects up to a five year payback, and innovative partnerships like that between Breathe Energy and the Green Investment Bank offer Energy Savings Agreements, whereby the client is guaranteed a standard of performance, rather than owning and managing the asset.

Crucially, these agreements also meet with new accountancy rules for the NHS which regulate debt, and will come into effect in 2019. Any money invested would not be viewed as debt on the trust’s balance sheet.

In short, understanding our estates through technology and investing in appropriate and optimised building infrastructure is a fundamental task facing the NHS in the coming years.

These trusts are proving that even in these stretched times, if budget-holders are empowered, the clever use of technology and financing can deliver savings and patient benefits. It’s time to get on with it.

Alexandra Hammond is associate director of sustainability at Essentia