How healthcare estates power regional growth

The productivity loss alone costs the UK economy an estimated £264 bn annually, impacting national output by as much as 10 per cent. But behind these numbers are real people, real communities, and real opportunities for change. If we are to reverse this trend, we must rethink how we deliver healthcare not just as a service, but as a strategic investment in regional growth.

The buildings within our healthcare estates including our hospitals, clinics, diagnostic centres, and community health hubs, are more than bricks and mortar. They are the physical infrastructure of health and wellbeing. When designed and deployed strategically, they can become powerful engines for economic regeneration, social cohesion, and improved public health.

The economic case for health infrastructure

The NHS’s 10 year plan sets out a transformative vision: shifting care from hospitals to communities, moving from reactive treatment to proactive prevention, and embracing digital innovation. These goals may be ambitious, but they are also achievable if we invest in the right infrastructure.

Healthcare estates are central to this transformation. Community-based facilities reduce pressure on hospitals, improve access to care, and support early intervention but their impact goes far beyond clinical outcomes. They create jobs, stimulate local economies, and attract further investment.

According to the NHS Confederation, every £1 invested per head in the NHS returns at least £14 in regional and national growth. This multiplier effect is not simply theoretical, it can be seen on the ground in projects like the Gateshead Metrocentre Community Diagnostic Centre (CDC), delivered by AtkinsRéalis, where we turned a liability into an asset.

Rethinking vacant spaces

Located in a vacant House of Fraser retail space, the CDC has provided over 43,000 diagnostic appointments since opening, created 134 jobs, and increased footfall in the Metrocentre by 3%, which is equivalent to 65,000 additional visitors.

With excellent transport links and free parking, the CDC is accessible and welcoming. Its success demonstrates how healthcare can be a cornerstone of placemaking.

By making healthcare facilities like these more accessible and within established town centres and high streets, it is delivering a clear economic benefit as well as better healthcare outcomes for individuals.

The ongoing devolution of the country’s cities and regions presents a unique opportunity to align healthcare delivery with regional growth strategies and build on the kind of success we’ve seen with the Gateshead CDC. As elected mayors gain greater control over budgets and planning, integrating health into their agendas becomes essential.

The NHS Confederation’s July 2025 briefing paper advocated for aligning Integrated Care Board (ICB) boundaries with regional authorities, and for including elected mayors on ICB governance boards. This would ensure that health is not treated as a siloed service, but as a core component of regional development.

Improving population health

Moreover, the new Health Duty on regional authorities requires them to consider how their actions can improve population health and reduce inequalities. This aligns perfectly with broader goals of increasing local investment, boosting employment, and enhancing community wellbeing.

Put simply, when health is embedded in regional planning, we create a virtuous cycle: healthier populations are more productive, more engaged, and more resilient — and that resilience translates into economic strength.

Nowhere is that more evident than on the high street, but in too many towns and cities the opposite is true. The decline of UK high streets is a visible symptom of deeper social and economic challenges.

In 2024, 13,500 stores closed, which is an average of 37 per day and the forecast for 2025 is even worse, with 17,350 closures expected. This erosion of community hubs impacts job security, local economies, and our collective sense of belonging.

Healthcare estates can play a pivotal role in reversing this trend. By locating health facilities in community settings such as underused retail spaces, we can breathe life back into struggling areas. These facilities not only provide essential services but also attract footfall, support local businesses, and foster a sense of place, the Gateshead CDC being a prime example.

There are of course initiatives in place now which are in place to drive projects that deliver on economic as well as health-based outcomes. One such examples is the Local Improvement Finance Trust (LIFT) programme which offers a number of valuable lessons.

More than 350 facilities have been delivered, primarily in areas of high deprivation and health need, generating significant economic impact by injecting £1.3 bn into SMEs, directing 80% of infrastructure spend to local businesses, and creating around 30,000 jobs.

Beyond the numbers, LIFT facilities improved access to care, reduced hospital pressure, and enhanced workforce health. They also demonstrated the value of public-private partnerships (PPPs) in delivering high-quality infrastructure.

A 2024 PWC report comparing PPP and non-PPP health buildings found that non-PPP assets often suffer from maintenance backlogs, impacting service quality. PPP buildings, by contrast, include built-in maintenance and operational standards, ensuring consistent performance. When assessed on a like-for-like basis, LIFT facilities delivered value over their operational term.

As the Department of Health and Social Care explores new PPP models for proposed health centres, these lessons must inform future contracts. Financial prudence is essential, but so is recognising the broader value of well-maintained, strategically located health infrastructure.

Unlocking private investment

Everyone is aware that public sector budgets are under immense pressure, so in order to deliver the scale of transformation required, we must attract private investment into the sector. Healthcare estates offer a compelling proposition for investors — they are essential services with guaranteed demand, located in communities that need regeneration.

By creating a positive environment for private development through clear planning frameworks, strategic site selection, and public realm improvements, we can de-risk projects and attract capital. CDCs and health centres draw people in, creating opportunities for allied services, retail, and housing.

Alongside this, initiatives such as the Small Sites Aggregator, part of the Government’s Infrastructure Strategy and 1.5 million homes initiative, can support this approach. By aggregating small, underused plots, (as we have been doing through our social housing developer EDAROTH) we can create social and truly affordable housing, directly addressing inequality in housing and supporting workforce participation.

When housing is aligned with healthcare, we build stronger communities. When those communities are healthy, they are economically vibrant.

So while the vision is clear and the political will is in place, collaboration is key to move forward at pace. The Great North Healthcare Alliance (GNHA) exemplifies what’s possible when healthcare trusts, regional authorities, and local councils work together. With aspirations to develop a £3 bn capital works programme, GNHA is not just building facilities, it’s building futures.

Their alignment with the regional mayor and local authorities creates a platform for coordinated investment, shared assets, and integrated service delivery. This is the kind of strategic partnership that can supercharge regional growth and placemaking.

In order to replicate this success, we need scalable investment models. We must move beyond pilot projects and embrace systemic change. That means rethinking how we fund, design, and deliver healthcare estates.

Addressing barriers to progress

There are significant barriers to progress, however, as local authorities since 2010 have faced cuts in central government funding, with services like social care and homelessness support consuming a disproportionate share of budget, leaving little room for proactive investment.

Housing options for vulnerable groups remain limited with a shortage of accessible, adaptable, and specialist housing for older adults and people with disabilities. Funding and governance structures are fragmented, making integrated service delivery difficult.

Yet there are solutions. Frameworks like the High Impact Change Model encourage collaboration between housing, health, and care sectors. Devolution gives councils more control over taxation and spending, enabling more responsive investment, and public-private partnerships can de-risk projects and ensure long-term stewardship.

We must also ensure that investment is evenly distributed. Too often, certain regions fall below national averages in health outcomes, infrastructure quality, and economic opportunity. Targeted investment in healthcare estates can help close these gaps.

A vision for the future

The UK economy is under pressure but we are not powerless. By investing in healthcare estates, we can deliver better services, improve public health, and drive regional economic growth.

This is not a novel concept. We have the data, the case studies, and the policy frameworks, what we need now is the will to act and the partnerships to make it happen.

Healthcare trusts, local authorities, developers, and policymakers must come together. Public bodies must collaborate to target areas and share assets. Private developers must be incentivised to invest in community-focused projects, and policymakers must create frameworks that support sustainable, scalable regeneration.

These developments can ignite the potential of an area — increasing footfall, unlocking business opportunities, and creating vibrant public spaces. The impact on regional Gross Value Added (GVA) and national GDP is significant, and should be factored into every business case.

The 2025 Treasury Green Book review provides clearer governance for regional investment and we have examples that prove the model works. By learning the lessons from past PPP contracts and introducing the right expertise, the right partnerships, and the right vision, we can grow together.

Let’s build healthcare estates that do more than treat illness. Let’s build infrastructure that heals communities, powers economies, and secures a healthier, more prosperous future for all.