• NHS trusts submitted bids worth more than £8.7bn after extra capital funds were announced 
  • HSJ analysis shows one in three bids were successful
  • Several STPs were left disappointed after bids for large projects were ignored 

Two out of three requests from NHS trusts for capital investment have so far been rejected under the government’s new funding regime, analysis by HSJ suggests.

In the last two years, providers have requested around £8.7bn of capital funding in more than 360 formal bids. Around £2.3bn has been allocated to date.

As part of a new regime introduced in 2017, trusts have had to submit capital bids through their local sustainability and transformation partnership.

This followed the Naylor Review into NHS estates, which called for around £10bn of “additional” capital investment to be channelled through STPs by 2021, on top of normal NHS capital budgets.

Chancellor Philip Hammond agreed to provide £3.9bn of this as public capital, with £2.9bn of that badged for STPs. He suggested the remaining £6bn would be delivered through private investment and land sales, both of which are yet to deliver significant funds.

NHS trusts have previously expressed frustration at the process of securing capital funding, with one STP chief describing the experience as “driving in fog”.

The £2.9bn was allocated in four “waves” during 2017 and 2018, and each STP was invited to submit bids to NHS England for capital to deliver local projects.

The bids were assessed by both NHS England and NHS Improvement, with approval granted by health ministers and Treasury officials.

HSJ asked all 227 providers for details of their bids, including those which were not approved by the STP for submission to the centre, with 201 trusts responding to the request. This analysis focuses on hospital, community and mental health trusts. Rejected bids which were resubmitted in later waves were not counted again.

In particular, the data revealed:

  • Hospital, community and mental health trusts bid for more than £8.7bn, and received £2.26bn;
  • The average amount awarded to each STP was £53.8m; and
  • Around £172m was allocated to ambulance trusts and primary care projects.

HSJ’s data, obtained through freedom of information requests, showed 15 STPs received more than the average amount allocated to health economies, while 27 STPs received less than average.

Although the money has been allocated, the trusts may still have to submit further information to unlock the cash. 

The only STP not to receive any funding was Northamptonshire. Both Northampton General Hospital Trust and Kettering General Hospital Foundation Trust submitted bids (worth a combined £109m), but Northampton’s was not agreed by the STP and Kettering’s bid was not approved centrally.

Northamptonshire STP did not respond to HSJ’s request for comment.

Six STPs were given less than £10m, and five STPs were given amounts worth less than 3 per cent of their bid value.

Ten STPs receiving least capital funds Amount awarded Amount requested
Northamptonshire £0 £109m
Kent and Medway £1m  £571m
Lincolnshire* £1.5m Incomplete
Norfolk and Waveney £4.5m £266m
East London £5m  £429.3m
Coventry and Warwickshire £9.4m £99.8m
South East London  £10.5m £320.7m
Cheshire and Merseyside** £10.9m  £374.3m
Bristol, North Somerset and South Gloucestershire £11.1m  £52.2m
Surrey Heartlands £11.8m  £17.6m

*Response not received from United Lincolnshire Hospitals Trust; **Response not received from Warrington and Halton Hospitals FT, Royal Liverpool and Broadgreen University Hospitals Trust, Cheshire and Wirrall Partnership FT, and Wirral Community FT. 

A spokeswoman for East London STP, which received just £5m of the £439m requested, said the lack of capital funding was “extremely disappointing” and “raised questions” about the STP’s clinical strategy.

The STPs for Kent and Medway, and Norfolk and Waveney said they were considering their next steps.

At the other end of the spectrum, six STPs received more than £100m. Nine STPs received more than 50 per cent of their bid value.

Ten STPs receiving most capital fundsAmount awardedAmount requested
Shropshire, Telford and Wrekin* £312m Incomplete
Cumbria and the North East** £159.2m £276.1m
Mid and South Essex*** £133m Incomplete
Dorset £115.3m £271m
Hampshire and Isle of Wight £115.1m £615.4m
North London £104.2m £323.6m
West Yorkshire and Harrogate**** £96.5m £771.1m
Humber, Coast and Vale £96m £145.4m
Somerset £91.1m £91.1m
Devon £90m £226m

*Response not received from Shrewsbury and Telford Hospital Trust; **Response not received from Newcastle upon Tyne Hospitals FT and County Durham and Darlington FT; ***Response not received from Southend University Hospital FT and Mid Essex Hospital Services FT; ****Response not received from Bradford District Care FT. 

Frimley Health, Somerset, and Suffolk and North East Essex all had their bids accepted.

The amounts STPs requested varied dramatically, ranging from £771m by West Yorkshire and Harrogate to £17.6m by Surrey Heartlands.

Trusts submitted bids for many different schemes. Common themes were reconfigurations of acute services, refurbishments of emergency departments, and new theatres. 

Unusual requests included a £16m bid for a private finance initiative buy-out (Buckinghamshire, Oxfordshire, and Berkshire STP), tower block cladding (Cheshire and Merseyside STP), and the creation of a manufacturing facility to provide cancer services to other NHS trusts (North West London STP).

Meanwhile, several large reconfigurations costing hundreds of millions of pounds remain uncertain after bids for the plans were rejected.

These include:

  • The transformation of Leeds General Infirmary, including centralising children’s services in a building for maternity, neo-natal, and adult services (£410m);
  • The redevelopment of Whipps Cross Hospital in East London (£343m);
  • The redesign of acute services in East Kent (£303m);
  • Work on the Evelina Hospital in South East London (£310m); and
  • The redevelopment of acute services in West Hertfordshire (at least £300m).

The remainder of the £2.9bn was awarded directly to three other projects. These were the completion of PFI hospitals in Liverpool and the West Midlands, which had stalled after the collapse of building contractor Carillion, and the new Defence National Rehabilitation Centre near Loughborough.

The government’s £3.9bn capital plan also involved spending £100m on GP streaming in hospitals (already spent), £200m for supporting efficiency improvement in areas such as energy, electronic prescribing and electronic rostering, and £700m for backlog maintenance.

The Department of Health and Social Care’s annual accounts show that capital spending averaged around £4.8bn per year between 2010-11 and 2016-17. It increased to £5.2bn in 2017-18, which suggests “additional” spending in that year of around £400m.

Meanwhile, the government has scrapped the PFI, without offering detail on whether other public private partnerships will be considered for capital investment.

A new capital settlement, to accompany the NHS long-term plan, is expected to be announced in the upcoming spending review.

A DHSC spokesman said: “We want patients to continue to receive world-class care in world-class facilities – delivered by our dedicated NHS staff – which is why we are giving the NHS £3.9bn to transform and modernise hospitals and launch new health services.”

See the attached file to view the capital bids by each trust. 

Revealed: The winners and losers of government's £2.9bn capital pot