Former Minister warns patients will have to wait twice as long for new hospitals under Government plans
Labour MPs raise concerns about delays and urge new Australian model of healthcare development using private investment
Think tank report warns NHS patients dying early, with capital investment half other nations
The former Labour Cabinet Minister Lord Hutton has warned that patients will be waiting twice as long for new hospital buildings while the Government rules out private investment in the NHS acute sector. His intervention comes on the back of comments he made on the need to accelerate defence investment.
Giving evidence to the Health and Social Care Committee John Hutton, who chairs the AIIP, told MPs:
“We can either continue with the New Hospital Programme in a way that's been set out. And the analysis that we've done in the association indicates at best we might get 45 hospitals built over the next 25 years. In the 10 years of PFI we built 90 hospitals over 10 years so that's twice the output over half a period of time.
“This is your choice - if we don't deploy private capital you're going to all have to wait probably twice as long for the hospital your constituents need.
The Government announced at the last Budget that it would allow PPPs to be re-introduced into the health sector to build new Neighbourhood Health Centres, but has so far refused to allow the same to be done to accelerate hospital building, following the moratorium introduced in 2018.
Lord Hutton continued:
“All of the PFI projects that were completed in the first 10 years of the last Labour Government were NHS planned and delivered; they were conceived within the local NHS; they reflected the NHS's local priorities for refurbishing the capital estate.”
Labour MP Danny Beales, a member of the Health and Social Care Committee, questioned if delays to the New Hospital Programme were accounted for in the financial cost-benefits which have doubled in his constituency of Uxbridge and South Ruislip.
“With the New Hospital Programme pledged by the last government, I think one was built, maybe a handful of others. My own hospital didn't even have a business case signed off after 14 years. The project was originally budgeted at my own hospital at £700 million. This government has now funded it for £1.4 billion. It's a huge - potentially two hospitals - worth of money. It’s that kind of inflationary pressure in the system with the time it takes for a Treasury business case to be signed off.”
Dr Mark Hellowell from the University of Edinburgh told MPs:
“I don't think we've ever seen historically the level of capital investment that we had between 1997 and 2010 in the healthcare estate and in large part that came through PFI.”
The New Hospital Programme, announced by the previous Government in 2020, has been beset by delays. Some of the hospitals planned will not start construction until 2039, while the NAO found that Private Finance Initiative (PFI) hospitals were built “on time and on budget”.
The intervention comes after the publication of a report by the centre left-leaning IPPR think tank, which was launched at an event with the Health Secretary Wes Streeting earlier this week. The report warns of preventable deaths in an NHS which has historically invested half the amount into capital compared to other OECD countries.
The IPPR report welcomed public-private investment and called for a revisit of capital budgets.
“Despite rising overall spending, the UK invests around half as much as comparable countries in buildings, equipment and technology. This long-term imbalance has left the NHS with fewer beds, outdated estates and a critical shortage of diagnostic capacity—undermining performance across access, outcomes and productivity.”
People are dying earlier as a result:
“The NHS’s performance, measured against comparable systems, is sobering. On treatable mortality – deaths from conditions where timely care should prevent a fatal outcome – the NHS is the second-worst performer among the 22 countries analysed, ahead only of the USA.”
The AIIP New Models Report proposes a series of changes to the way PPPs are developed to learn the lessons from previous schemes, such as PFI - which built or rebuilt around 700 new schools, hospitals and other public buildings. The report outlines 35 recommendations across 7 areas for an improved PPP model, in order 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.
One key lesson from previous schemes is to avoid needless complexity and challenges with public sector capacity and capabilities. These have been exploited by adversarial third party contract managers in a way that has led to value being leaked from assets that would otherwise be spent on the assets themselves for the benefit of patients, doctors, nurses and health staff.
Barry White also gave evidence at the session who wrote an independent report into making improvements in how PPP contracts are managed, which witnesses urged ministers to read.
Investors also point to how PPPs are now being used in other countries such as Australia and New Zealand, where the ‘precinct model’ can crowd in outside capital to develop place-based schemes which provide better value for money than traditional procurement, and build healthcare neighbourhoods with a wide range of services alongside housing and transport development.
Paulette Hamilton MP, another Labour member of the committee, urged ministers and civil servants to look at the Australian precinct model:
“I think it's a good model and I can see where in the 10-year plan that model would fit well but I think there are issues around the legal and financial aspects.”
A review into the Australian PPP system by Infrastructure Partnerships Australia found costs efficiencies of up to 31% compared to traditional procurement.
ENDS
Editor’s Notes
Session details and witnesses: 15 April 2026 - Delivering the Neighbourhood Health Service: Estates - Oral evidence - Committees - UK Parliament
Recording of Health and Social Care Committee Session: Parliamentlive.tv - Health and Social Care Committee
90 hospitals were built under PFI in less than a decade, with the capital investment totalling £10.1 billion (which would be around £19.2bn in today’s prices - assuming inflation from 2001 to Oct 2025). Source: AIIP Research based on HM Treasury returns: 90 PFI hospitals were built with the longest construction time being 9.67 years (3,528 days between OJEU and construction completion), the average construction time was less than six years. Excludes hospitals where the OJEU date is not known. More details: https://www.aiip.org.uk/aiip-report-new-models-parameters and PFI vs NHP Comparison - Google Sheets
The National Audit Office report ‘Lessons learned: private finance for infrastructure’, released in March 2025: Public Private Partnership (PPP) projects are “usually delivered on-time and on-budget”. Lessons learned: private finance for infrastructure
Table 4: wave 3 schemes (to start construction between 2035 and 2039)New Hospital Programme: plan for implementation - GOV.UK
IPPR Report: Bismarck versus Beveridge revisited: Does the model shape the outcome? | IPPR and write up: https://www.aiip.org.uk/news/preventing-deaths-and-decay-a-capital-moment-for-our-nhs
NHS Confederation Report - PFI projects “appear to offer better value for money than the recent New Hospitals Programme (NHP), once delays and overspend costs are accounted for.” Raising NHS capital funds: options for government | NHS Confederation
Infrastructure Partnerships Australia Report, 2016: “PPPs demonstrate clearly superior cost efficiency over Traditional procurement, which can range from 30.8 percent when measured from project inception, to 11.4 percent when measured from contractual commitment to the final outcome.” IPA_PPP_FINAL.pdf