“Let’s build some hospitals” - Lord Hutton speech to the Westminster Health Forum
Speaking during the Westminster Health Forum NHS Estates policy conference, Lord Hutton urged the Government not to waste another year debating models of private-public partnerships.
Lord Hutton said: ‘Private capital today is like a reservoir behind a dam. It's a fund of long-term capital from pension funds and insurers looking for stable social infrastructure projects to invest in.'
Lord Hutton said private capital had delivered 90 hospitals in less than a decade in the early 2000s - or more than double in half the time than that scheduled for the New Hospitals Programme.
The NAO has predicted that construction delays cost the NHS £100-140m a year with the current maintenance backlog standing at almost £15bn.
Lord Hutton said PFI was ‘not a perfect model', acknowledging issues with flexibility and transparency and the rigidity of some of the contracting frameworks but argued ‘it is still wrong to conclude from those shortcomings that all forms of public-private partnership are fatally flawed somehow'.
‘Under PFI, complex facilities were built on time and on budget and have been maintained at far higher standards than non-PPP estates,' Lord Hutton said.
He highlighted how private capital models had evolved to achieve 17-35% cost reductions in Germany and argued the Local Improvement Finance Trust (LIFT) provides a model that works for neighbourhood health centres and had delivered more than 300 primary and community care facilities in England.
‘With political will, clear commissioning signals and streamlined approvals, a significant wave of neighbourhood facilities could be commissioned within a year or two whether new builds or repurposing existing assets and spare capacity,' Lord Hutton said.
‘The LIFT platform gives us a ready-made delivery vehicle and we should definitely pick it up and run with it.'
The event was reported in Healthcare Management and the full text of Lord Hutton’s speech is below.
Westminster Health Forum policy conference:
Next steps for the NHS estate in England
09.00, Monday, 9th March 2026
***Check against delivery***
The role of investment partnerships in delivering modern healthcare infrastructure
Good morning, and thank you to the Westminster Health Forum for the invitation to speak at this important conference. It was very interesting to hear what [Dr Chrysikou and Professor Stafford] had to say.
For those of you who don’t know us, I chair the AIIP - we’re the trade body for investors in PPP assets, founded in 2023. Our members represent over 70% by value of current PPP assets in the UK, around £50bn. As the voice of Britain’s social infrastructure investors, we want to help find the investment to rebuild Britain - and in particular our NHS.
I want to make three simple, practical arguments this morning.
First: let’s build some hospitals before the next election.
Second: let’s build a wave of neighbourhood health centres using the proven LIFT model.
Third: let’s not spend another year debating models of public-private partnership — because the work has already been done.
1. Let private investors build hospitals — now
The facts are stark.
Under the PFI programme of the 2000s, around 90 hospitals were built in less than a decade, with an average construction time of six years.
By contrast, the non PFI New Hospital Programme, announced six years ago, has delivered only a handful of schemes. On current projections, traditional procurement will deliver around 45 hospitals over more than 25 years.
That is half the output in more than twice the time.
Meanwhile, the National Audit Office estimates that delays to hospital upgrades are costing between £100 and £140 million every year just to keep ageing buildings functioning. The wider NHS maintenance backlog stands at nearly £50 billion.
Delay is not neutral. It is expensive. It is inefficient. And it has consequences for patient care and staff morale. NHS leaders like the Confederation have been urging change for over a year.
Now, let me be clear. PFI was not perfect. There are perceived challenges with flexibility and transparency.
But it is simply wrong to conclude from those shortcomings that all forms of public-private partnership are flawed. Under PFI complex facilities were built on time and on budget, have been maintained to a far higher standard than the non-PPP estate and the consensus of opinion is that construction and operational risk transfer has worked effectively.
Around the world, modern PPP models have evolved. In Germany, a recent independent academic comparison found lifecycle cost reductions of between 17 and 35 per cent, energy savings of up to 30 per cent, faster build times and lower construction costs.
The private sector today is like a reservoir behind a dam — full of long-term capital from pension funds and insurers looking for stable social infrastructure projects.
The water is there. But unless the Government lifts the gate — by providing policy certainty and a clear pipeline — nothing flows.
If ministers were to signal clearly that a tranche of hospitals — even five or ten schemes — would be delivered using modern PPP structures before the next election, markets would respond rapidly.
We do not need another abstract debate about ideology. We need the fierce urgency of delivery.
2. Build neighbourhood health centres quickly — using LIFT
The second argument is about neighbourhood health centres.
Six hundred and twenty days ago, the Government committed to building a network of centres to bring care closer to communities — diagnosing earlier, integrating services, reducing pressure on acute hospitals. But we don’t yet know from the Government where they want the centres built.
And yet we already have a model that works: Community Health Partnerships and the Local Improvement Finance Trust — LIFT — programme.
I know Nafees is speaking shortly, but it’s worth remembering that under LIFT, more than 300 primary and community care facilities were delivered across England, often in areas of high deprivation, integrating GPs, diagnostics, community services and sometimes even social care and voluntary provision under one roof. To the benefit of patients.
These are not mega-projects. They are not complex nuclear power stations.
They are health centres. A few consulting rooms in a small building with a reception and some flexible space design that can adapt to changing health needs and align to local priorities.
With political will, clear commissioning signals and streamlined approvals, a significant wave of neighbourhood facilities could be commissioned within a year or two — whether new build, modular, or repurposing existing assets and spare capacity.
The National Audit Office has acknowledged that partnership models are more likely to deliver projects on time and on budget. The NHS Confederation has argued that existing partnership vehicles could be mobilised quickly.
So why are we spending months — sometimes years — designing from scratch structures that already exist and commissioning expensive lawyers and consultants?
The LIFT platform gives us a ready-made delivery vehicle. We should use it.
3. Stop debating new PPP models — the work is done
My third point is perhaps the most important.
There is a risk that we spend the next year — perhaps longer — debating what to call the next generation of public-private partnerships.
PFI 2? The New Mutual Investment Model? Social Infrastructure Concession 3.0?
At the main trade body for social infrastructure investors - the AIIP has been working for over two years on precisely this issue.
We have commissioned research, drawn on international evidence and engaged extensively with investors, advisers and public sector stakeholders.
The AIIP ‘New Models’ report - published on our website - 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.
Our proposals would strengthen public sector capability; lock in long-term maintenance standards; and deliver fairer risk sharing.
The renewal of PPP should reduce complexity where not warranted, and measure what matters - some current contracts have over 500 separate measures of performance, presenting an administrative burden on all parties, often for limited benefit.
Any new model should be supported by a joint commitment from politicians, NHS Trusts and industry leaders to foster a more collaborative, partnership-based approach to contracting. The report recommends breaking down unitary charges so that those responsible are better held to account, using technology and digital tools such as digital twins to track asset performance, standardising asset handbacks, and introducing regular contract reviews to adapt to changing needs. Finally, it recommends reducing unnecessary contractual complexity by focusing on meaningful performance measures and proportionate penalties to deliver better outcomes for users and taxpayers.
Some contracts the AIIP have examined have 500 different performance measures. That serves no good purpose for anyone - public or private sector.
Simpler but more targeted accountability will enable the achievement of better outcomes directly for end users, and indirectly for taxpayers.
We have shared this work in detail with NISTA, the Department of Health and Social Care and the Treasury.
There is no shortage of intellectual capital in Whitehall about how to structure these projects.
It is essential that existing commercial models are simplified and not made more complex by third party legal and commercial advisors who thrive in complexity.
Above all, what is needed now is a decision.
If we delay until every possible concern has been theoretically resolved, we will deliver nothing. And every year of delay compounds the maintenance backlog, drives up costs and postpones better care.
No-one wants to see their elderly relative stuck in a crowded corridor or worry about a concrete roof collapsing in their local A&E, when a solution could be mobilised rapidly.
A wider point about urgency
Britain has underinvested in physical capital for decades. Since the early 1970s, we have spent less than half the OECD average on public capital formation.
The one period when we came closest to closing that gap was during the major PFI infrastructure programmes of the late 1990s and 2000s — when public and private capital were mobilised together.
PPPs are used successfully in Australia, Canada and across Europe. Often, dare I say it, by fairly left wing governments. Whatever your politics, we know the state can’t deliver everything.
A historical reminder
We were not always this hesitant.
In the nineteenth century, this country built over 20,000 miles of railway track in little more than two decades — transforming trade, mobility and public health.
After the Second World War, we created the NHS itself in just a few short years — and built the hospital system to support it. Incredibly many of those buildings are still in use.
In the 1960s, the new towns programme delivered entire communities at pace. The entire M1 motorway was built in 18 months.
In the 2000s, the NHS hospital building programme moved far more quickly than we are managing today.
We used to understand something simple: that infrastructure is not a luxury add-on. It is the foundation of national wellbeing.
Somewhere along the way, we allowed process to replace purpose.
Conclusion: build — now
So my message this morning is simple.
Let private investors build some hospitals before the next election.
Let us use the LIFT model to deliver a wave of neighbourhood health centres in the next year or two.
And let us stop spending precious time inventing new labels for partnership structures when workable models are already on the table.
The capital is available.
The need is urgent.
What is required now is clarity, resolve — and the political will to build. Thank you.
Lord Hutton is the Chair of the AIIP.