Britain should launch an NHS Rapid Upgrade Programme to unlock up to £16bn of private investment in ageing hospitals, according to former Health Minister Lord Hutton.
The proposal, backed by the Association of Infrastructure Investors in Public Private Partnerships (AIIP), would allow carefully structured, value-for-money extensions to existing NHS PFI contracts, enabling investors to refinance projects and inject billions of pounds into upgrading hospital buildings, expanding capacity, improving energy efficiency, and supporting the government's Net Zero ambitions.
New AIIP analysis suggests that extending contracts across 151 NHS PFI projects due to expire during this Parliament could unlock around £15.4–£16bn of investment – almost enough to address the NHS's entire estimated £16bn maintenance backlog. The modelling indicates individual NHS Trusts or projects could receive around £180m of upfront investment for modernisation and expansion.
The AIIP believes the approach would:
- Unlock around £16bn of private capital for NHS infrastructure.
- Help tackle the NHS maintenance backlog.
- Expand hospital capacity and improve patient care.
- Accelerate Net Zero upgrades across the NHS estate.
- Reduce pressure on public finances by transferring construction and delivery risk to the private sector.
Addressing delegates at the Westminster Business Forum conference PFI contracts – managing expiry, handback and future infrastructure investment in July, Lord Hutton said: “Britain has a delivery problem. We know we need new hospitals. We know we need modern primary care. The real question is much simpler: how do we actually build it?"
“Around ninety hospitals were delivered through the original programme in less than a decade. Today, some replacement hospital projects have spent well over a decade simply working their way towards construction.
“The debate should not focus solely on handback. We should instead ask a more ambitious question. How can these assets become the foundation of an NHS Rapid Upgrade Programme?
"Sometimes the fastest way to create new capacity is not to start again. It is to build intelligently on what already exists."
Also speaking at the conference was Simon Reason, director at the National Audit Office, who noted the strong delivery performance of the original PFI programme (“Ninety-nine per cent of PFI was delivered on time and on budget,” he said.)
Lord Hutton said that this demonstrated that the lessons of previous PPP programmes should be used to improve future delivery rather than prevent investment altogether: “Learning lessons should never become an excuse for forgetting the successes of PFI and PPPs. Governments are rarely remembered for the procurement model they selected. They are remembered for what they built.”
