• Capital injection to come in two waves with £2.7bn to rebuild six hospitals by 2025
  • Second wave promises £100m in seed funding, aiming for 34 hospitals to be built by 2030
  • Third wave has been promised with an open competition to decide who gets the capital

The government has announced a £3bn capital investment plan to rebuild hospitals and replace diagnostic equipment.

The programme of investment, which it describes as part of a new “health infrastructure plan”, will see two five-year tranches of capital funding for building hospitals and buying new equipment, according to a Conservative party announcement.

Phase one will inject £2.7bn of cash into six hospital trusts to carry out major rebuilds of hospitals by 2025. Projects lined up for the cash include Barts Health Trust to rebuild its dilapidated Whipps Cross hospital and Leeds Teaching Hospital, to replace the Victorian Leeds General Infirmary.

The second phase, the party says, will set out to deliver 34 hospital rebuilds between 2025 and 2030 by providing £100m of seed funding to support the development of business cases for 21 building projects around the country. It includes Hillingdon Hospitals Foundation Trust and Imperial College Healthcare Trust, the top two trusts for backlog of maintenance costs in England. The Conservatives’ statement indicates full funding will be forthcoming for these between 2025-30.

The announcement – made by Boris Johnson as the Tory party conference gets under way today – indicates that it accepts further capital development funding is needed beyond these tranches, and says there will be a subsequent third phase of building from 2030 to 2035. “Today’s announcement is the start of much longer hospital building programme,” it says.

The party said the capital would be funded via taxation not “private finance initiatives”.

But the current committed funding figure falls well short of the £50bn which NHS England chair Lord David Prior has suggested was needed. It also falls short of £10bn previously commited by government – though the timeframes are not directly comparable.

The government also said all trusts will receive a share of £200m “to replace MRI, CT scanners and breast cancer screening equipment, so that no scanner in the NHS is more than 10 years old” – an announcement trailed earlier this week.

The HIP comes in addition to the £853m promised by the prime minister in August for 20 new capital investment projects. Leeds Teaching Hospital Trust is included in both the August tranche, £12m for new laboratory information management system, and the first wave of funding for a new hospital by 2025.

The Royal Cornwall Hospitals Trust was awarded £99.9m in August to build a new women’s and children’s hospital in Truro. It is also included in the second phase of the HIP and will receive seed funding for a new building programme to replace the Royal Cornwall Hospital, also in Truro.

The HIP will be in addition to the capital spending limit already agreed for 2020-21, set before today’s announcement at £7.2bn. No capital spending limits have been set beyond 2020-21.

The Department of Health and Social Care has also announced today that the NHS will a receive multi-year capital settlement from the next capital review, most likely at the next budget. This is so the department can “develop capacity, plan effectively, get better value for money and deliver on the commitments we have already made,” the DHSC said today.

NHS England and others have been pressing for a comprehensive multi-year settlement and major building programme.

Health and social care secretary Matt Hancock said today: “Rather than the piecemeal and uncoordinated decisions of the past, we will be taking a strategic approach to improve health infrastructure and set the priorities for the NHS over the long term.”

NHS Providers welcomed the new capital commitments but said the NHS “has been starved of capital since 2010” and has a £6bn maintenance backlog, half of which is “safety-critical”.

The NHS needs to see the capital budget double over the next five to 10 years, according to Chris Hopson, NHS Providers chief executive.

”It’s not just these six hospitals who have crumbling, outdated infrastructure – community and mental health trusts, ambulance services and other hospitals across the country have equally pressing needs,” he said.

“Whilst the extra £3bn spread over the next five years – an average 10 per cent annual increase – is an important and valuable step, there’s still a long way to go,” he added.

Government promises £3bn hospital building programme