New Hospitals

Lord Allan of Hallam Excerpts

Thursday 25th May 2023 Lords Chamber

[Baroness Wheeler (Lab)]

My Lords, I thank the Minister for reading out the Statement. It has been clear for the last year that we would have to come to this moment of the Government finally admitting that achieving their 2019 manifesto pledge for 40 new hospitals by 2030, under the new hospitals programme, was never on the cards, and that reality would have to take over. The Government must face the reality of the timescales and the scale of the money needed to address the NHS’s crumbling estate, and the reality of needing to prioritise and address the urgent rebuild and major maintenance problems of existing hospitals throughout the country, which are seriously endangering patient safety and the public.

This morning, it was reported that the announcement of the Government’s realisation of not being able to keep their promise was delayed

“because of fears about a backlash from Tory MPs”.

Was that vital information kept from the public because of such fears? Can the Minister tell the House when the target was abandoned internally?

We know that NHS maintenance costs have more than doubled, from £4.7 billion in 2011-12 to £10.2 billion in 2021-22, and about the dire condition that many hospital buildings are in. For example, Leeds Teaching Hospitals saw over 100 raw sewage leaks last year, including faeces leaking into wards and patient rooms; Hampshire Hospitals NHS Foundation Trust was forced to suspend some services because of a rat infestation; and the hospital in King’s Lynn, Norfolk, is one of the most prominent hospitals that has had to be propped up with steel and timber supports to stop its dilapidated roof caving in.

Do the Government have an estimate of how much they expect NHS maintenance costs to continue to rise until 2030? Is there a full overall strategic plan for this and the now-reprioritised 40 new hospitals programme? If so, when will it be published? After government announcements on the programme, only in February described by the Minister opposite as “world-class” and capable of being exported “around the world”, we have become familiar with the idea that the hospitals were not new, that many were not even hospitals and that “new” could include repairs and redecoration.

The Nuffield Trust put the number of new hospitals in the Government’s original programme—meaning those that we would all recognise as new—as three, not 40. The National Audit Office called the programme unachievable, and NHS Providers estimated the real costs of building new hospitals as £20 billion, not the £3.7 billion allocated by the Government. Can the Minister commit to publishing the latest estimate that his department has made of the cost of the now-revised programme? Can he now say specifically which of the new hospitals in today’s Statement are being kicked into the long grass beyond 2030?

The slow progress being made was clearly evident last February when it emerged that only 10 of the projects even had planning permission. Just last week the BBC reported that building work is yet to start for 33 of the 40 projects promised. Will the Minister commit to coming back to the House with detailed implementation, timescales, costs and scope of what is now proposed? The fact is that the programme has been hit with delays and uncertainty for years, and the longer this goes on, the higher the costs soar and the less likely it becomes that they will ever be built. Most of the hospitals in the programme are still waiting to hear what their final budget will be, and none of the six that were supposed to be ready for 2025 has full planning permission or funding yet.

On the seven hospitals built with reinforced autoclaved aerated concrete—RAAC—the Government acknowledged in December the enormous concerns and safety implications and committed to eradicating this from the NHS estate. The Government have now officially recognised what we all knew—that these hospitals are not safe to operate beyond 2030. We welcome the news that they will all be completely rebuilt and the promise that this will be fully funded. Can the Minister tell the House the specific funding that is to be committed to the seven hospitals? Can he also tell the House when we are to receive the full details of the new, reprioritised plan so that it can be properly scrutinised and assessed by this House?

[Lord Allan of Hallam (LD)]

My Lords, when I worked in business we had a maxim that we should always try to undercommit and overdeliver as a way of pleasing clients. It feels like the opposite is applying here, with the Government scrambling to show that they are not underdelivering on their overcommitment. Of course, 40 hospitals was a classic election promise, oversimplifying a much more complex need, with the reinforced autoclaved aerated concrete hospitals being one of those such complications that emerged once they had turned over the aerated concrete block.

I do not expect the Minister to comment on the election promise, but I hope he can comment further on three aspects of the Government’s programme that he has set out. The first is the modular hospital design approach, which certainly seems a very smart way to proceed if it can provide more and better-quality hospital capacity at lower cost. Of course, any negative impact of failures in design will be multiplied if you are using a similar, consistent design. We should remember that RAAC was the future once, and public buildings were built according to that specification because it was seen to be cheaper and better back in the 1950s and 1960s. What assurances can Ministers give us that they will get it right this time and that the modular approach being used everywhere is the right one? By the way, on branding, 2.0 is now very 1.0, and it might be more appropriate to call it “the metahospital” or “Hospital.AI” these days.

The second is the planning process, which the noble Baroness, Lady Wheeler, raised. It does not matter if the modular design allows much quicker construction if everything is held up in seeking the relevant permissions to build the hospital in the first place. I would be interested to hear how many of the schemes have been given planning permission already and the extent to which the Government see planning as potentially a disruptor to their plans.

Finally, on the risks, if there are delays or cost overruns, which we hope there will not be—but inevitably one sees those with schemes of this kind—I look for assurances from the Minister that the contracts are written in such a way that any additional bills will not fall back on the taxpayer and, crucially, that if some schemes overrun or get into difficulties and incur extra costs, it will not mean that other schemes in the programme have to be cancelled as the overall budget runs short.

[Lord Markham (Con)]

I thank noble Lords for their comments. On a personal front, this is a project I have been working on directly. It is very close to my heart and is something that I am delighted to be able to put forward. I would like to mention a couple of hospitals that probably did not get quite the prominence they deserved in the earlier Statement, which happen to be quite close to my heart as well: the North Manchester General Hospital, which is one of the Cohort 3 hospitals. I have worked closely with Manchester City Council in the past on the redevelopments around Manchester Mayfield, and that is very much part of the plans. Also, being an ex-deputy leader of Westminster Council, I am excited by the plans around St Mary’s, where we are looking at a couple of alternative sites. That will be in conjunction with the plans for the refurbishments of Charing Cross and Hammersmith so we have got three hospitals in one. Just to clarify an earlier statement: the surgical hub is planned for Chorley and South Ribble Hospital rather than the Royal Preston Hospital.

I am not quite sure on the point from the noble Baroness, Lady Wheeler, about the target being abandoned. What we were saying before was not that at all. We were saying we are positive about how it is progressing. To the point from the noble Lord, Lord Allan, about overpromising and underdelivering, I am sorry for the branding of the hospital 2.0 approach, and I take the blame for that. In terms of MMC, I was at one of the plants the other day, and it really is amazing the way its builds them and the speed with which they will go up. Many buildings have built like that for a long time. When I was up there, I saw them constructing the new Everton stadium, which is just one example. I believe that they will give the necessary speed we need for them all.

In terms of the funding, the estimate, as mentioned, is more than £20 billion. Each hospital has an indicative allocation. They are fully funded. We are not publishing them for obvious reasons: when you go out to tender, you do not want to tell the marketplace what you are expecting to pay. I hope noble Lords understand the reason for that. I am confident that the funding is in place. The hope in all of these things, as we have seen in the prison space and the schools space, is that if the first hospital costs £100 to build, the next one costs £95, the next one £90, the next one £85 as you get the economies of scale. So, you should be seeing 20% to 25% reductions, as you do a large production line. The benefit of all this is that there is such a mass volume of them all that you get the economies of scale. I genuinely hope that this will become the way we build hospitals for generations to come. It is very much cross-party, something that we all believe is a good way forward.

Some hospitals, as mentioned—as part of the timing and to try to make sure it all works in terms of the funding envelope—have been pushed into the 2030-35 bracket. They were mentioned in the Statement, and we have been speaking to them about that. They include Eastbourne, the Royal Berkshire, all the ones around St Mary’s with the complications there, Lancashire and Charing Cross to name just a few. In all those cases, they understand the reasons, and I think most people understand the need to prioritise the RAAC hospitals as a matter of absolute urgency.

On the questions about the planning process, we are on target. Obviously, you do not want to get planning permission too early, given the time it takes. In all the programmes I have seen, we do not yet have planning permission because we do not yet need it. I am confident that we are on track. We know that there are always X factors in these types of projects but, when you have so many, you want the flexibility to move some forward and some back, in a portfolio-type approach. That is well known when you are running as many projects as this.

At this stage, in all honesty I can say that we are as confident as we can be that we are on target to build them. Undoubtedly, there will be bumps in the road, and we are grown up enough to know that there are challenges, but I can say with a high degree of confidence that this really is the best approach. We will have world-class hospitals that will be state of the art, not only in their design but in their use of digital technology. A hospital today that is fully digitised costs 10% less per patient. With these hospitals, we should be looking at savings of 20% or more. That will really make a material difference to how we treat patients, increase productivity and be seen as the real way forward. I am very hopeful that the economics will become so compelling that this programme will not stop at 40 hospitals—in fact, 45, because of the extra ones we have brought in—and will become a rolling programme across the whole estate.

I am sure that we will have many more questions on this. As I say, it is my pet subject, as the priority lead, so I would be happy to talk about it in greater detail at a suitable juncture.