Conclusion

The government has announced a vision for a more technology- and data-driven NHS. This has the possibility to transform patient services and improve patient care. Yet there is uncertainty around how this vision will be funded, particularly at a time when NHS trusts have had the value of their equipment fall by 10% since 2010/11.

Although the government has pledged an extra £20.5bn in funding for the NHS by 2023/24, this does not include any funding for the capital budget. The 2019 Spending Review needs to make long-term capital-funding commitments.

The capital budget cannot continue to be used to relieve short-term pressures on front-line services. Capital-to-revenue transfers must stop, as they will only continue the current short-termism with regards to capital spending. This is only pushing problems into the future, and has resulted in a growing maintenance backlog and multiple years of negative growth in capital funding. It has also made it difficult to make long-term capital decisions, as there is no certainty about funding.

Capital must be a key component in transforming NHS services. The 2019 Spending Review should include a long-term commitment to capital funding that reverses the recent trends of declining capital spending and a rising maintenance backlog. If capital spending was increased to be in line with the OECD average – as it was between 2008 and 2010 – this would require the DHSC capital budget to be £9.5bn in 2019/20. This would be a £3.5bn increase on top of the current capital budget in 2018/19, rising to £4.1bn by 2023/24.

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Acknowledgements

The authors would like to thank Debbie Patterson and the NHS Improvement economics team for their feedback and insight into this report.

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