Capital programmes need whole system change

Samuel Rose, director, health strategy, IMPOWER Consulting, and Dr Nicole Samuel, commercial director for the National Centre for Child Health Technology at Sheffield Children’s NHS Foundation Trust, present findings from a qualitative research programme examining how clinical and digital transformation can be embedded within large-scale healthcare capital programmes. Drawing on case study reviews, interviews with programme leaders and CEOs, and analysis of hospital openings, their research reveals a persistent and dangerous gap between the transformational ambitions built into business cases and the operational reality that new hospitals face at opening.

When a new hospital opens its doors, the assumption is that things will get better — for patients, for staff, and for the health system. New facilities are conceived to solve longstanding problems: ageing estates, fragmented care pathways, rising demand, and a workforce stretched to its limits. Yet the uncomfortable truth, borne out by hard evidence from recent major hospital openings, is that a new building can make things worse before they get better — sometimes significantly so — if the transformation required to make it work is not planned, funded, and delivered in parallel with the bricks and mortar.

This is the central finding of research conducted by IMPOWER Consulting, working in collaboration with UCL’s Bartlett School of Sustainable Infrastructure. The study examined three recent major hospital openings — the Royal Adelaide Hospital in Australia, the Royal Liverpool University Hospital, and the Midland Metropolitan University Hospital in the West Midlands — alongside interviews with approximately eight New Hospital Programme (NHP) programme leaders and a survey of programme directors on transformation readiness. What the research reveals is not just an observation about past projects, but an urgent warning for every capital programme currently under development in the NHS.

Understanding the transformation gap

At the heart of the problem is what the research terms the ‘transformation gap’: the distance between what a new build is designed to achieve and what people, processes, and technology are actually ready to deliver on opening day. This gap is not simply a matter of programme management. It is structural. It is baked into the economics of hospital building itself.

The business cases underpinning NHP schemes are built on ambitious assumptions. They routinely project a 12 per cent reduction in average length of stay and a 1.8 per cent reduction in acute bed demand — reductions to be achieved through redesigned care pathways, digital integration, virtual wards, and a significant shift of services into community settings. These are not aspirational footnotes; they are the operational and financial foundations on which the capital case for investment rests. Without them, the numbers simply do not add up.

The financial stakes are considerable and are often underestimated at programme level. When a new hospital opens, the Trust faces a significant and immediate increase in recurrent revenue costs and productive targets: potential additional workforce expenditure driven by single-room layouts and changed staffing ratios; higher assumptions on activity throughput; higher facilities management costs from larger floor areas; greater digital operating costs; and depreciation on the new asset and Public Dividend Capital (PDC) charges paid to DHSC on the value of public capital invested.

In the current NHS financial environment, where existing budgets are already under extraordinary pressure, these new costs can represent a significant financial challenge for individual Trusts and their Integrated Care Boards — on top of very challenging financial improvement plans.

The research found that the responsibility for meeting these costs falls squarely on local organisations — Trusts and ICBs — not on the national NHP programme, whose primary focus remains on managing capital expenditure and build programme timeline. This creates a critical and largely locally owned risk.

When assumptions outpace readiness: lessons from recent openings

The case studies examined in the research provide a sobering illustration of what happens when the transformation gap is left unaddressed.

• Royal Adelaide Hospital, Australia

Opened in 2017 as a flagship public-private partnership hospital in South Australia, the Royal Adelaide was designed around an integrated model of care, seamlessly connecting infrastructure, IT systems, and workforce. In practice, the integration failed to materialise at pace. Local media reported on chronic emergency department overcrowding, major failures of its electronic patient administration system (EPAS), workforce burnout, and collapsing staff morale characterised the first years of operation. Budget overruns were reported as exceeding AU$600m, and the operational company responsible for the hospital was eventually placed into administration. Staff described the transition as a “recipe for disaster” to local reporters.¹

The Royal Adelaide’s difficulties were not the result of a poorly constructed building; they were the product of insufficient investment in the prevention and planning work required before the doors opened. The building was completed, but the workforce, public and health system was not.

• Royal Liverpool University Hospital

The Royal Liverpool, which opened in 2022 following years of delays and the collapse of its original contractor, was designed with 640 beds — with others moved to other parts of the system. This reduction was predicated on the assumption that virtual ward capacity and community reablement services would be sufficiently developed to reduce acute demand by the time of opening. They were not. The result was well documented severe emergency department overcrowding and corridor care, with staff describing conditions to the BBC as “dreadful” and care quality in visible decline, writing a letter to management saying they were “embarrassed, ashamed, and demoralised” by the standard of care.² The transformation and change the business case depended upon simply was not in place.

This case illustrates one of the most challenging dimensions of NHS capital programmes: the dependency on system-wide change that lies largely outside the acute Trust’s direct control. When those dependencies are not managed, the new facility bears the consequences. After a substantial effort from the local teams, in 2025 the CQC rated the A&E as “well-led” and noted it had a “positive culture” — nearly three years after the initial challenges from opening.

• Midland Metropolitan University Hospital

By contrast, the Midland Metropolitan University Hospital, which opened in 2024 as a ‘super hospital’ consolidating acute and emergency services for the Black Country, offers a more encouraging picture. Sandwell and West Birmingham NHS Trust took a proactive and explicitly named approach: ‘More than a hospital’. The Trust invested early in digital integration, implementing its electronic patient record before opening, established a system-wide transformation programme with clear governance and trajectory, and reframed its organisational identity around the principle of ‘a community trust with a hospital in it’. Early performance data suggests improved ED performance and reduced admissions, and it is more resilient to winter pressures. The Trust also recognised that it could not run an organisation and transform care models simultaneously with the same leadership team, and explored dedicated delivery structures accordingly.

Importantly, the research notes that Midland Met’s success was a result of investment in transformation and out of hospital care and workforce transformation in the years ahead of opening. It is not a completed story, but it demonstrates what deliberate, well-resourced transformation leadership can achieve when it is treated as central to a capital programme rather than peripheral to it.

The Cost of quality: a framework for understanding the risk

The research applies the Cost of Quality (CoQ) framework — adapted from manufacturing and engineering — to healthcare capital programmes. The framework distinguishes between prevention costs (investments made upfront to avoid failure), appraisal costs (ongoing monitoring and assurance), internal failure costs (problems identified before go-live), and external failure costs (problems that emerge after a facility has opened and patients are using it).

In estates terms, this framing is intuitive. Professionals working in healthcare estates management understand deeply that underinvestment in maintenance and assurance processes generates far greater costs downstream. The same logic applies to transformation. When programmes underinvest in the clinical, digital, and cultural change required to make a new facility work as intended, the resulting external failure costs — patient safety incidents, financial distress, workforce burnout and turnover, reputational damage, and years of operational instability — vastly exceed what adequate prevention investment would have cost.

The research found that prevention and appraisal costs are consistently and significantly underfunded in NHP schemes, even where programme leaders are acutely aware of the transformation required. The reasons are systemic: Trusts are operating under extreme pressure, with limited capacity to look beyond immediate operational demands; the skills and resource required to lead complex transformation alongside a major capital programme are in short supply; and there is, as yet, no clear national blueprint for how such transformation should be embedded and managed.

What the data shows: readiness across the programme

The findings from the programme director survey are striking. Approximately 75 per cent of NHP programmes reported that they were unclear on the specific operational changes needed to deliver their business case assumptions. More significantly still, not one programme surveyed was actively tracking transformation metrics alongside construction milestones. In a programme that places considerable emphasis on standardised design, governance, and construction efficiency, transformation — the very thing that determines whether a new hospital delivers the outcomes it was built for — remains largely unmonitored and unassured at programme level.

This finding has direct and immediate relevance for estates and programme leaders. The Gateway Review process, which provides structured independent assurance at key decision points in capital programmes, does not currently require transformation readiness to be evidenced with the same rigour as construction or financial milestones. The research argues compellingly that this must change.

Implications for programme leaders

The research sets out a four-stage framework for embedding transformation within capital programmes, which translates directly into a set of practical imperatives for those leading NHP schemes and analogous capital investments:

1. Reframe and quantify the ambition. Programme leaders must understand and explicitly quantify the transformation gap — the gap between where their organisation is today and where it needs to be on opening day. This requires honest, evidence-based analysis of current performance against business case assumptions, and a clear articulation of the risk if the gap is not closed. Too often, the research found, this analysis is either not conducted or its conclusions are not translated into funded action plans.

2. Create real confidence through early action. Transformation trajectories must be mapped to specific projects and milestones, not left as abstract commitments. Investment cases for transformation must be developed and secured separately from the capital case. Pilot and test-and-learn programmes should begin years before opening, treating go-live as the final validation of a well-tested model rather than the first real test of an untested one.

3. Deliver at scale, in parallel with construction. Whole-scale transformation programmes must run alongside capital construction, with dedicated leadership and dedicated resource. The research is clear that Trusts cannot transform care models using the same leadership team simultaneously managing day-to-day operations; dedicated transformation capacity — potentially through a hosted ‘NewCo’ or ring-fenced delivery structure — is likely to be necessary for the most complex changes to allow teams to work across traditional organisation boundaries. Metrics must be tracked ruthlessly and reported at board and Gateway Review alongside construction milestones.

4. Build long-term resilience into governance. Governance structures must provide clear accountability for transformation outcomes, explicit escalation routes when trajectory drifts, and a culture of learning and continuous improvement. System-wide change — particularly the shift of services into community settings that underpins many NHP business cases — requires governance that extends beyond the acute Trust to encompass the full ICB system.

For estates managers and capital programme leaders specifically, there is an additional and practical implication. The design and configuration of new facilities already encode assumptions about how care will be delivered: the number of beds, the layout of wards, the design of emergency departments, and the location and sizing of clinical adjacencies. These design decisions are downstream consequences of clinical and operational models. When those models are not yet defined, or when there is insufficient confidence that the workforce and system can deliver them, the building itself may be fundamentally misconfigured for the operational reality it will face.

Estates professionals need to convene system partners around the build programme — coproducing a funded transformation programme that transforms services in line with the design assumptions. Research suggests the impacts on local people, the workforce, and the health and care system can be huge if they do not.

Conclusion: assuring both transformation and capital build

The NHS is embarking on the most significant programme of capital investment in a generation. The New Hospital Programme represents an extraordinary opportunity to modernise infrastructure that in some cases has been unfit for purpose for decades. But the research is unambiguous in its conclusion: new buildings do not, on their own, deliver better care. They create the conditions in which better care becomes possible. Realising that possibility requires the same discipline, resourcing, and assurance that we apply to the construction itself.

One NHS chief executive, quoted in the research, put it plainly: “Current capital and operating costs are likely to be unaffordable in every NHP trust and system.” That is not a counsel of despair — it is a statement of the scale of the challenge, and a call to take it seriously. The organisations that will open their new hospitals successfully are those that treat transformation not as an add-on to the capital programme, but as its most important deliverable.

The risk of not transforming is not theoretical. The cases of Royal Adelaide and Royal Liverpool demonstrate, in human and financial terms, what that risk looks like when it materialises. Midland Metropolitan demonstrates that a different outcome is achievable with the right investment, the right leadership, and the right commitment to making transformation the true measure of success.

References

1 News.com.au, Billion dollar bungles at the Royal Adelaide Hospital, Australia’s most expensive building, puts ‘lives at risk’, 2018.

2 BBC, Royal Liverpool Hospital: New A&E overcrowded and chaotic, medics say, 2023.

Further reading

• Rose S, Samuel N. Embedding Transformation in Healthcare Capital Programmes: Lessons from Leading Approaches. European Healthcare Design Congress; 2025.
• IMPOWER Consulting. Roundtable Briefing: Embedding Transformation in NHP Programmes. October 2025.
• The Health Foundation. Demand for health and social care: projections to 2032—33. 2023.