After many years of uncertainty, a clearer roadmap for the future of the NHS is taking shape, with the government’s neighbourhood health plans starting to galvanise many of us across the sector — from investors and developers to contractors and service providers.
In particular, the government’s decision to re-open the door once again to public-private partnerships (PPP) in health infrastructure delivery represents a vital step change, and is something that the investment community has been calling for over many years.
Without doubt, it is crucial that the NHS remains a ‘free at the point of use’ service, based on patients’ needs and not their ability to pay. Nonetheless, there is also widespread recognition that the private sector has a crucial role to play, not least to help address the capital shortfall in the NHS which stands at a staggering £37bn according to the 2024 Darzi report.
Using PPP to attract private investment into the NHS is the best way to ensure that the health service continues to have the right facilities, in the right places, to serve local health needs. And this is about far more than just money — the private sector can also bring vital skills experience and expertise to support NHS ambitions to build the high-tech, modern, digital healthcare infrastructure needed to underpin a shift towards neighbourhood health
With more details expected to emerge over the coming months, neighbourhood health plans have captured huge private sector interest, and I was pleased to help launch the Neighbourhood Health Forum earlier this year as a collective new voice in neighbourhood health delivery.
The Forum brings together nine private investors with an unrivalled track record in neighbourhood health delivery, with our members, having delivered £10bn of health infrastructure across 1,400 community facilities over the last 20 years. For such a large group of like-minded investors to come together, we can clearly see the huge appetite of the private sector to help shape, finance, and deliver this critical next chapter for the NHS.
It also shows the broad industry consensus that the public and private sectors working together is the right approach. As the government finalises its new health PPP delivery model over the coming months, the Neighbourhood Health Forum stands ready to play its part, using our unrivalled experience to help shape the right partnership models and the right investment approach that will deliver for the NHS, patients, and local communities.
But as we look to the future of healthcare and some of the significant opportunities ahead, there are also often valuable lessons to be learned from the past — a case of ‘back to the future’ if you like.
A much-needed LIFT
This year also marks the 25th anniversary of the NHS Local Improvement Finance Trust (NHS LIFT) programme — a PPP model that was designed to bring together the NHS, Department of Health, and private sector organisations to jointly deliver much-needed new primary care infrastructure in the heart of the community.
Since it was set up in 2001, LIFT has demonstrated the huge strength of a PPP approach to deliver health infrastructure at scale and where it is needed most. Over the last 25 years, the LIFT programme has secured over £2.5bn of private capital to deliver 350 quality community health centres across England. Crucially, nine out 10 NHS LIFT health centres have been delivered in deprived communities, ensuring that vital health facilities have been delivered to those that need them most.
As chair of The LIFT Council — the umbrella group of private sector partners in the NHS LIFT programme — our members continue to see the vital role our buildings play in the NHS, serving at the frontline of primary health care in communities the length and breadth of the country.
And as we look back on what LIFT was set out to deliver 25 years ago, the challenges and opportunities facing today’s health landscape are strikingly similar — once again we face an NHS in need of crucial investment and modernisation; a clear focus on moving more care into neighbourhoods, and the need for private investment to make it happen at a time of constrained public resources.
It is therefore no surprise that the government’s 10-Year Health Plan published last year made clear references to the ‘successful’ NHS LIFT model and pointed to it as a key building block as a new PPP model is created to help deliver the next chapter for the NHS. Indeed, the government’s recently published Neighbourhood health framework again picks out LIFT buildings as an important way to deliver on its neighbourhood health ambitions, saying that ‘Our wave 1 pipeline for 2026 to 2027 will largely focus on repurposing existing NHS buildings — mostly NHS Property Services and LIFT estates’.
And it is not only LIFT but also a number of other delivery models that can offer us important ‘lessons learned’. In the Neighbourhood Health Forum, many of our members are experienced not only in LIFT but also programmes like the Mutual Investment Model (MIM) and Third Party Development (3PD) programme that have helped to deliver some vital public infrastructure. Through this experience, we know where the public sector excels, and we know where we can best support as a private sector partner.
So, as we look back on 25 years of LIFT and our experience of other PPP models, what have we learned and how can it help to shape our future approach to health estates delivery? For me, five key points stand out.
1. The need to deliver at scale and pace
With the government re-opening the door to the private sector in its neighbourhood health plans, we have already seen considerable interest from investors, contractors, and service providers. However, what we now need is scale and pace to help lock-in this newfound confidence and keep up the momentum.
If the UK is to secure investment in its neighbourhood health plans, a clear pipeline of projects under a new PPP model is essential. Any sign that neighbourhood health infrastructure will be delivered in an ad hoc or piecemeal basis will simply erode private sector confidence and interest. However, if a solid pipeline is put in place, investors and other industry partners will move quickly when they see clear opportunities. The NHS LIFT programme offers a useful example where a clear and sustained pipeline of projects helped to attract a range of investors and supply chain partners to deliver 350 NHS community health buildings over 25 years.
Likewise, the ‘batching’ of projects — where investors could deliver a number of health buildings across a single city or region — was also a key factor in LIFT’s success. Batching allowed investors, contractors, FM, and MSA providers to put in place dedicated resources, and also brought benefits in terms of economies of scale and improvements to the design, construction, FM, equity, and lifecycle elements of the projects.
We should hear more on the government’s neighbourhood health centre plans soon, and the early signs are that a ‘batching’ approach is being considered, so it is encouraging that things seem to be moving along the right track.
2. The need for a strong public sector partner
As a new PPP model for health delivery is unveiled this year, private sector organisations will also be looking for the reassurance that there is a strong, credible public sector partner involved — ideally with an equity stake.
An enduring strength of the NHS LIFT programme has been that the NHS (through Community Health Partnerships) has offered a credible, consistent public sector partner across all of the 350 health centres delivered since 2001. Crucially, the NHS has also maintained a 40 per cent equity stake in all NHS LIFT buildings (with the private sector taking a 60 per cent stake) meaning that, over the last 25 years, the public and private partners have been able to shoulder the challenges and share the successes together.
Likewise, with the Mutual Investment Model (MIM) in Wales — where the public and private sectors have worked in partnership to deliver new roads, schools and health infrastructure — a key reason for MIM’s success is because key projects have embedded the Welsh Government (with a 20 per cent equity stake) as a strong counterparty to private investors.
A strong public sector partner is also the best way to draw a distinction with some of the baggage of PFI projects of the past, which were often criticised for decision-making and financial outcomes being stacked too firmly in favour of the private sector. PPP models have moved on considerably since then, and having a strong public sector partner with an equity stake will ensure full transparency, joint decision-making, and shared returns for the public sector.
3. The need to prioritise quality
Through issues like the NHS’ huge maintenance backlog — and wider infrastructure issues like RAAC concrete — the condition of the NHS estate continues to be in the headlines for all the wrong reasons. This simply underlines the need to place a greater premium on ‘quality’ as we look at delivering new Neighbourhood Health Centres.
Again, this is something that existing PPP models have tackled head on. If we look again at MIM, we can see a clear step-change that better prioritises the quality of the buildings being delivered under PPP arrangements. By way of illustration, the delivery of new schools and colleges in Wales under MIM has embedded a focus on quality from the outset, backed with clear intervention measures should quality issues start to arise.
This includes some simple but hugely effective steps, such as establishing a clear and detailed ‘output specification’ for each asset — this then becomes a contractual obligation on the private partners, backed by financial penalties if standards are not met through the life of the project. It includes the appointment of an ‘Independent tester’ to oversee the quality of works throughout construction, and with the power to bring works to a stop if there are concerns. And it includes a minimum four week settling in period between construction completion and practical completion. This ensures everyone has the opportunity to settle into the building and are happy with it — before the final sign-off.
As has been seen with older PFI models and projects, issues with the quality of construction or misuse of the building can become a huge operational issue in the long-term. MIM and other PPP models have learned from this, with a much greater focus on quality from the start, it has changed the dynamic of the public-private delivery and ensured that buildings are built to last. The same will be key in the delivery of new NHS buildings, so as a new PPP model for health is developed, embedding similar measures that prioritise quality will be an essential step.
4. The need to deliver social value
Over the last few decades, there has rightly been a growing recognition of the need to deliver community benefits and lasting social value alongside major new public infrastructure.
It is an area that the NHS LIFT programme has a strong track record in over the last 25 years, with LIFT buildings often becoming far more than just a health centre. Instead, they have evolved into vital community hubs for local residents, delivering a wide range of benefits and services far beyond simply health provision.
Through my own organisation Fulcrum Infrastructure Group, I have been involved in a range of community initiatives and social value projects delivered alongside our 42 NHS health centres. From Active Ageing sessions for older patients and legal clinics for local residents, to drama groups for pregnant women, and community gardening projects for vulnerable adults, we have been proud to deliver some award-winning initiatives to further support local health priorities, and drive huge social value in the local community.
But while many other private sector organisations have also taken a similarly proactive approach to delivering social value, there is always the underlying risk that it is seen as a ‘nice to have’ and something that can be quietly dropped over time, as cost pressures and other challenges emerge.
To help tackle this, MIM has again delivered a significant step change, where contracts build in stretching targets for investors to deliver community benefits and social value (including local job creation, training and apprenticeships, and community initiatives) with financial penalties for non-delivery.
If the government is to be successful in delivering new Neighbourhood Health Centres, it will need to get local communities on-board and be supportive of the plans. Embedding clear community benefits and social value within the new PPP model is a clear way to achieve this.
5. The need for flexibility and a refined approach to FM
An enduring (and sometimes fair) criticism of some older PFI models were that they tied the public sector into complex, rigid contracts, particularly in terms of Facilities Management and maintenance. We have all heard the ‘£300 to change a lightbulb’ example which, while possibly apocryphal, underlines the challenges we need to overcome if we are to reintroduce private finance in health infrastructure.
However, what this overlooks is that in many of the newer PPP models that have followed — including NHS LIFT — important lessons have been learned with contracts that are now much more flexible, allowing changes to be implemented more easily and regularly.
Likewise, our experiences under MIM have pointed to an improved, refined approach to FM which we believe a new health PPP model could look to replicate.
This includes a six-month grace period for FM companies to allow them to focus on properly mobilising their teams and systems before facing the deductions included in the payment mechanism. Ensuring FM teams are properly mobilised at the start will lead to a better overall service delivery over the long-term. MIM contracts also look to include ‘wipe clean’ provision, which improves the ability of the public sector partners to re-procure FM services if needed — the inclusion of these ‘break clauses’ (e.g. at 5, 10, 15 years). This ensures a long-term commitment from the FM partner, but with incentives to deliver high quality every day.
There are many other examples from other PPP models, but LIFT and MIM demonstrate the importance of building flexibility and efficient ‘change mechanisms’ into any investment and delivery model for new health infrastructure.
Grounds for optimism
So, to conclude, there are grounds for huge optimism in health estates, with the government’s neighbourhood health plans starting to offer clarity and a roadmap to how the private sector can support the next decade of the NHS.
But as we look to the future, there are often important lessons to be learned from the past. The 25th anniversary of LIFT, and experiences from many other partnership delivery models, all offer important signposts we should follow as we look to tackle the NHS estates’ challenges of tomorrow.