New Hospital Programme delivery on track

The government’s recalibrated New Hospital Programme (NHP), initiated a year ago, has established a more sustainable and realistic foundation for the long-term development of NHS hospital infrastructure, although the ambitious replacement of facilities constructed with reinforced autoclaved aerated concrete (RAAC) will now extend beyond the original 2030 deadline, according to an NAO report.

Following a comprehensive review by the Department of Health & Social Care (DHSC) and an updated National Audit Office (NAO) report, the NHP has adopted a phased delivery strategy, pushing completion of the final hospital schemes to 2045–46.

The programme’s reset encompasses 41 schemes – spanning new-build hospital projects as well as significant refurbishments – divided across four delivery waves to be implemented over the next two decades. To date, five hospitals have already reached completion. Allocation decisions have focused on schemes most advanced in planning and those feasible within current departmental spending limits, supported by a revised capital expenditure forecast that now totals approximately £56 billion. This adjustment represents a £33.8 billion increase on estimates provided in 2023, reflecting a more realistic approach to both cost inflation and the complex demands of healthcare construction, with a contingency reserve of £12 billion embedded to absorb market, engineering, and environmental pressures.

Despite heightened prioritisation within the revised framework, replacement of the seven hospitals predominantly built using RAAC will not meet the previously established 2030 target. These projects are now projected for completion between 2032 and 2033, a delay substantiated by independent assessments that confirm the safety of continued operations through rigorous maintenance, albeit at increased cost and with ongoing operational risk. Already, over £500 million has been invested to prevent structural failures, and interim maintenance expenses are expected to impose a further annual burden of up to £140 million.

The DHSC is actively pursuing operational efficiencies and market opportunities through the rollout of its “Hospital 2.0” model, featuring standardised designs intended to streamline procurement, reduce delivery times, and foster technological integration. Benefits identified by the NAO include improved patient care, increased single-patient rooms, enhanced infection control, digitised records, and innovations such as infrared monitoring. The move to standardisation and centralised delivery is projected to deliver greater return on investment, with savings and operational enhancements worth up to £7.5 billion compared to traditional models where trusts procure individually.

To encourage supplier engagement, DHSC has elicited interest from over 20 main contractors and is advancing 16 pre-qualified bidders in a ‘competitive dialogue’ process designed to refine technical solutions ahead of formal tenders. This approach presents a significant pipeline of business for contractors, consultants, and technology providers prepared to adapt to the new Hospital 2.0 template and its elevated integration of digital infrastructure.

However, the delivery environment remains challenging. A tight construction timetable over the next five years leaves little room for slippage, and the NAO has identified workforce shortages within the NHP delivery organisation as a critical risk, with nearly 40 percent of public sector roles unfilled in late 2025, particularly within digital, legal, commercial, and technical functions.

Key recommendations from the NAO call for robust programme oversight, careful management of demand modelling, strengthened long-term cost controls, and continual refinement of community healthcare integration to avoid future capacity shortfalls. For firms across the construction supply chain, the NHP’s expanded scope, centralised procurement, and focus on digital and standardised solutions present substantial opportunities for both established and new market entrants committed to advancing the UK’s healthcare infrastructure.

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