How will capital planning and allocation work under the white paper proposals?
20 May 2021
The recent government white paper on health and care has indicated that capital will be managed and allocated at a system level rather than the historic route via NHS trusts. Under these proposals the new statutory integrated care systems (ICSs) will be required to take responsibility for a system capital plan across all NHS providers that meets a system level Capital Departmental Expenditure Limit (CDEL).
This sensible, system led approach, would mean capital could be strategically deployed rather than the traditional process of Trusts competing for scarce funds at a national level.
However, it presents some questions:
- How will this approach sit with a well-defined Department of Health/Treasury approval process that is well established (albeit ripe for streamlining)?
- And how will local ICS plans dovetail with national infrastructure plans such as the National Hospital Programme which is currently managed centrally?
- How do individual organisations overcome traditional thinking whereby capital is invested in new hospitals, rather than being prioritised to deliver broader system improvement alongside investment in digital infrastructure?
A One Public Estate?
There is clearly a need for a system estates strategy, but estates ownership across any ICS is fragmented. Imposing an estates strategy from the centre is fraught with difficulty due to hospitals and other buildings being owned by different organisations and this fragmentation is yet to be resolved. Not to mention the limitations CDEL places on cross public sector collaboration on estates planning and development.
On top of this, a lot of commissioner estates capabilities were lost when clinical commissioning groups (CCGs) were devolved out of primary care trusts (PCTs), so experienced estates professionals are in short supply and in constant demand across the NHS.
We are already getting a preview of how this may all look in reality as we observe multiple Trusts working together to deliver a system wide estates strategy.
However, the initial impression is that this collaboration can see slow progress and results in a level of frustration as, understandably, each capital project wants to work at its own pace. Thus illustrating the need for proactive and aligned system leadership.
Making it work
We welcome more collaboration across NHS organisations in the development of system estate strategies, but there are hurdles to overcome. In particular, the fragmentation of estate ownership is a real issue as well as the accounting principles limiting the ability to transform.
However, the COVID-19 pandemic has demonstrated that boundaries can be set aside and how estate planning can work very effectively at system level. We are already starting to see how this pandemic collaboration, both in relation to the Nightingale hospitals set up and step down and the development of elective recovery plans, set some strong foundations for future system estate working.
If you have any thoughts, or if you would like us to talk to you or your senior team or board, please get in touch.