Ever since the Government announced its NHS 10-Year Health Plan in July last year, bold plans to open 250 new neighbourhood health centres (NHCs) have caught national headlines. While plans to localise healthcare and take the pressure off hospital outpatients has been met with praise, it has also led to a lot of headscratching around the exact roadmap on what these new centres will look like and, crucially, how they will be funded.
However, the Autumn Budget, followed by a recent statement from a Government health minister, has added a little more clarity, with expectations that 80% of newly built NHCs being privately funded through public-private partnerships (PPPs), while around four in 10 of all NHCs will be in existing NHS buildings. So, with PPP re-entering the picture, the question now is what can we learn from previous PPP structures and how can ICBs best prepare for their return.
What can we learn past PPPs?
Looking back at previous PPPs, it's clear they thrive when there is clarity of scope, a long asset life and predictable demand, providing private investors with more certainty for returns. This often means new-build facilities with well-tested designs and clear service models are more investable than complex schemes without a coherent vision for delivery. In theory, this should make NHCs an attractive offer for private investors, combining well-established practice areas under one roof without the need to create more bespoke, complex treatment facilities. Though simplicity is key, earlier PPPs also highlight the risks of inflexibility. Given clinical models can change quickly as research and patient needs evolve, buildings must be easily adaptable to meet this as quickly and cost-effectively as possible. Schemes will only deliver value for the public sector where capacity is well-utilised and partners work together to ensure the facilities are flexible enough to accommodate changing service requirements. With NHCs housing multiple services under one roof, an adaptable approach will be essential to ensure facilities can keep pace with service delivery.
However, PPPs are only as good as the partnership between the public and private sectors. As with any partnership, success hinges on the strength of relationship between the partners involved. It is essential for all partners to be on the same page, with motivations underpinned by common goals where possible. Where objectives differ, which will be the case in some instances, each partner should understand the rationale behind them rather than feeling threatened or setting against them unreasonably.
To refurbish or not to refurbish…
While new facilities will be key to opening NHCs, the NHS also has a large estate of either empty or underutilised facilities. Refurbishment of existing primary and community estates is often the fastest and most cost-effective way to expand capacity and improve care delivery, particularly in urban areas where land availability is limited. It also makes use of existing underutilised or run down sites before developing new sites, ensuring existing estates are used effectively without unnecessarily adding additional capacity.
However, refurbs carry much higher risks for private investors compared to newly-built facilities. Refurb schemes usually have a relatively low value and can have unknown asset conditions, meaning project costs can quickly escalate as issues arise. Shorter design lives can also hurt returns and make investments much riskier.
Given the complexities of refurbs, direct public funding is often the only option to unlock these unused assets. It seems the Government is very much aware of this, given its statement confirmed that any refurbs would be completed through solely public funding.
How can ICBs best prepare
All of this means ICBs across the country are preparing to manage a mix of refurbs and new developments across both public funding and PPPs, raising the question of how they should be split to best deliver for communities.
The first step for ICBs is to fully understand their existing estates, particularly current usage, and any available capacity or underutilised buildings. They will also need to consider how the estate will be able to adapt to the intended service model which, in turn, needs mapping against what the future looks like under the NHS' 10-Year Health Plan. Any estate strategy should also consider the potential split between PPP-funded new builds and public-funded refurbishments, rather than treating NHCs as a single delivery model. A key focus for ICBs will be to prepare for PPPs by creating an attractive proposition for prospective private investors. ICBs will need to develop credible pipelines, consistent specifications and robust demand forecasts to give investors confidence while retaining local flexibility.
NHCs will be a crucial testing ground for PPPs over the coming years. Enough time has passed for us to reflect on PPPs of the past, understand how they work best and apply them to this new form of community care. With some additional clarity from the Government and with the right preparation and understanding of the conditions that make PPPs a success, ICBs can lay the groundwork to ensure delivery is smooth and patient access and outcomes improve.
