Australia’s ‘Precinct Model’ could offer a new approach to UK infrastructure
In written evidence to Parliament’s Health and Social Affairs Committee, the AIIP has highlighted Australia’s “precinct model” as a promising framework for improving how the UK plans and delivers major infrastructure projects.
The submission forms part of the Committee’s inquiry into Neighbourhood Health Centres. While the evidence addresses several issues affecting the UK’s infrastructure landscape—including the expiry of PFI contracts and the need for stronger commercial capability in government—it also points to international examples that could help shape future policy.
A Different Way to Deliver Infrastructure
The precinct model, widely used in Australia, takes a more integrated approach to infrastructure development by combining multiple projects within a single geographic area. Rather than delivering infrastructure as isolated schemes, the model focuses on developing entire districts or “precincts” in which transport, housing, commercial development and public services are planned together.
This approach allows infrastructure to be coordinated around long-term economic and social outcomes. By planning infrastructure at this broader scale, governments can unlock greater economic value and avoid inefficiencies that sometimes arise when projects are planned individually.
Case Study: Herston Quarter, Queensland
A prominent example is the Herston Quarter redevelopment in Brisbane, delivered by Australian Unity in partnership with the Queensland Government. The project transformed a five-hectare site adjacent to the Royal Brisbane and Women’s Hospital into a mixed-use health and community precinct.
At the centre of the development is the Specialist Rehabilitation and Ambulatory Care Centre (SRACC), delivered through a public-private partnership. The facility plays a critical role in supporting community health by focusing on sub-acute care, helping patients transition out of expensive acute hospital wards and preparing them to return home.
Beyond the hospital facility, the broader precinct incorporates a range of complementary developments, including a private hospital, aged care facilities, retirement living, student accommodation and retail spaces. This integrated model allows the government to deliver an important public health facility without requiring upfront capital investment, while the private partner assumes the commercial risk associated with the surrounding residential and commercial components.
The result is a health-focused urban district that combines public infrastructure with private investment to support healthcare delivery, housing and economic activity.
Case Study: New Footscray Hospital, Victoria
Another example is the New Footscray Hospital in Victoria, currently under construction through the Plenary Health consortium. The project illustrates how modern hospital developments can serve as civic anchors within broader community precincts.
Unlike many traditional hospital designs, which are often isolated from surrounding neighbourhoods, the Footscray project integrates community-focused features such as a “village green,” childcare facilities and retail spaces. This approach aims to make the hospital a place that residents visit for everyday activities, rather than solely for emergency or acute medical care.
The development also forms part of a wider health and education precinct connected to Victoria University. By linking healthcare infrastructure with education and research facilities, the project supports workforce training, innovation and local economic development.
Lessons for the UK
The evidence highlights that the UK has historically relied heavily on the PFI and PPP model to deliver individual assets such as hospitals, schools and transport projects. While these projects have delivered important infrastructure, AIIP suggests the UK now has an opportunity to rethink how infrastructure investment is structured.
Adopting elements of the precinct model could help address longstanding challenges in UK infrastructure policy, including fragmented planning, limited coordination between projects and difficulties attracting long-term capital into major development programmes.
Summary of Recommendations for Government
Delivery of the 250 Neighbourhood Health Centres (NHCs) on time and on budget is fundamental to Neighbourhood Health. 120 NHCs are due to be delivered by 2030, 70 of them as New Builds and 80% of those New Builds using PPPs.
PPPs are a recognised means of delivering social infrastructure on time and on budget. PPPs, as a result of how they are structured - with ringfenced lifecycle maintenance, are also recognised as being maintained to a far higher standard than the non-PPP estate. The use of PPPs will therefore deliver Neighbourhood Health to a far higher standard and much faster than the alternative i.e. publicly funded procurement. The use of PPPs for Neighbourhood Health will also reverse decades of underinvestment in Health infrastructure and could support a change in perception of the UK as an investment destination.
Whilst the PPP model led to the construction and maintenance of 700 state critical assets to a very high standard, the model has been challenged and several lessons have been learned. A great many of them have been learned and applied in other jurisdictions where PPP has been in continual use and would need to be reflected in renewed PPP here in the UK. The AIIP New Models report outlines 35 recommendations across 7 areas for an improved PPP model, to improve transparency, reduce complexity and deliver value for money for the taxpayer. It includes developing “jointly appointed independent certifiers throughout construction” to ensure “impartial oversight and quality” built in from the point of procurement.
The publication of a clear and robust pipeline that is adhered to is essential for industry confidence, investor sentiment and market competition that will culminate in value for money pricing and delivery. Aggregating investment opportunities so that they are of sufficient size to draw interest from investors, construction companies and facilities management companies is also essential to creating competition and therefore value for money. It is also one of the lessons from the success of the NHS LIFT Programme, which built 350 community health centres. A failure to adhere to the pipeline, could in the context of the 2018 moratorium on the use of PPP in the UK, have grave implications for investor and market confidence.
It is important that the use of NHCs in the delivery of Neighbourhood Health includes sufficient community engagement to capture user needs and engineer social value; however, this must not compromise delivery timelines and the procurement process given the imperative to deliver 120 NHCs by 2030.
PPPs could be used to expedite the delivery of the New Hospitals Programme (NHP) and ensure that new hospitals are integrated with Neighbourhood Health and private sector capital is fully leveraged to realise taxpayer value and community benefit. PFI built around 90 hospitals in a decade, by comparison the NHP plans to build 45 hospitals over a 25+ year period (2020 - 2046). Adopting the "precinct model" of Public-Private Partnership (PPP), successfully used in Australia, offers a strategic pathway to expedite the delayed New Hospitals Programme while ensuring the critical integration of acute and Neighbourhood Health infrastructure.
Unlike traditional single-asset procurement, which risks perpetuating operational silos, this model leverages private sector expertise to master-plan mixed-use "health cities" where commercial developments - such as hotels and retail - cross-subsidise public facilities. By shifting focus from isolated buildings to holistic ecosystems, this place-based development approach not only improves financial viability but physically bridges the gap between hospital and home, ensuring that new infrastructure delivers seamless, community-integrated care.
The existing Local Improvement Finance Trust (LIFT) estate has expertise, spare capacity and could be easily re-purposed through contract variations and established supply chains of construction and facilities management companies to expedite the delivery of Neighbourhood and Community Health. In the efficient and timely delivery of Neighbour Health capacity it is imperative that existing LIFT infrastructure and planning and community needs analyses overseen by Community Health Partnerships is exploited in full.
Furthermore, the LIFT model has been highly effective, embodying true partnership working, with an absence of adversarial contract management and value leakage from costly disputes that could otherwise be spent on the assets themselves for the benefit of service users rather than accruing to third party commercial and legal advisors. Much of the success of LIFT is down to the significant public sector stake (40%), voting rights and transparency of governance and reporting.
Current state of NHS Estate
The current NHS estate has been under scrutiny for a chronic underinvestment. The NHS ‘Estates Return Information Report (ERIC) 2021-22’ stated that the total NHS backlog maintenance rose from £9.2bn to £10.2bn, an 11% increase over the past year and representing around 5% of total NHS budget. Of this amount, works estimated to cost £1.8bn are categorised as ‘high risk’. £3.8bn is seen as posing a ‘significant risk’.
The UK lagged behind the OECD more widely in the 2010s, recording a significantly lower level of gross fixed capital formation in healthcare (as a % of GDP). Such is the level of underinvestment that two NHS hospitals used coal-fired boilers until at least 2021.
The significant delays and funding shortfalls within the New Hospital Programme (NHP) have highlighted setbacks through programmes which rely on public capital. Under NHP only 5 of the 40 hospitals that are meant to be built by 2030 have been completed. In contrast, using PPPs, 90 hospitals were built in just ten years.
Preparing for the End of PFI Contracts
The submission also highlights the growing importance of planning for the expiry of PFI contracts, many of which will end over the coming decade. The National Audit Office has warned that some public authorities may not yet be fully prepared for these transitions, particularly in relation to asset condition assessments and documentation.
Better long-term planning will therefore be essential to ensure a smooth transition when contracts end. AIIP argues that lessons from international infrastructure frameworks—including precinct-style planning—could help governments think more strategically about asset management and infrastructure renewal as contracts expire.
A Potential Model for the Future
More broadly, AIIP’s evidence stresses the importance of improving the UK’s infrastructure governance and delivery systems, including strengthening commercial capability within the public sector and improving contract management.
The precinct model offers one potential framework for achieving these goals. By integrating infrastructure planning across sectors and aligning it with broader economic development, the approach provides a way to maximise the value of public investment while creating opportunities for private capital to support national infrastructure priorities.
As the UK considers how to evolve its infrastructure strategy beyond the traditional PFI model, international examples such as Australia’s precinct approach may offer valuable lessons for delivering infrastructure more strategically in the future.