New Hospital Programme on Firmer Footing

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30 January 2026

The reset of the New Hospital Programme (NHP) has put it on a more realistic timetable but with replacement schemes for hospitals built with Reinforced Aerated Autoclaved Concrete (RAAC) now expected in 2032–33, and a tight construction schedule overall with little contingency in the next five years, there are significant delivery risks.

The independent public spending watchdog has published an Update on the New Hospital Programme following their 2023 report and the Department of Health & Social Care’s (DHSC) decision to reset the programme after reviewing the timetable and costs.

The reset covers 41 hospital schemes, which range from whole new buildings to major refurbishments, and will be carried out in four waves over the next 20 years. An additional five schemes were already complete and open when the programme was reset in January 2025.

The final hospitals are expected to be completed in 2045-46. Although DHSC carried out analysis to rank the schemes, it ultimately prioritised schemes which were furthest advanced, and any smaller projects it could afford within its spending review settlement.

Government has allocated around £2 billion a year to the programme from 2025–26 to 2029–30, rising to £3 billion a year from 2030–31. An estimated total capital funding of around £56 billion will be required. More realistic planning assumptions mean that this is a £33.8 billion increase on the capital funding proposed in 2023. DHSC has built in a £12 billion contingency (21%) to reflect inflation, market pressures, engineering challenges and environmental requirements 

An independent 2022 report recommended that the seven hospitals predominantly built from RAAC should be replaced by 2030 at the latest. While DHSC has prioritised these in its revised plan, they will not be replaced by that date. A further report published in December 2025 concluded that, with mitigations and sustained maintenance, these hospitals can remain operational beyond 2030. However, these hospitals will face significant costs and operational risks including safety risks to patients. By 2025, the seven hospitals had required more than £500 million of investment to prevent structural failure.

Trusts whose new hospitals or refurbishments will open later will face additional costs to maintain ageing buildings for longer - estimated by DHSC at between £100 million and £140 million a year.

The programme plans to introduce a more standardised approach to design and construction. The new “Hospital 2.0” design is also working to improve efficiency and patient care, this should include each patient having their own room, shorter walking distances for staff, paperless patient records, and technologies such as infrared sensors to alert staff when a patient falls.

Across 28 Hospital 2.0 schemes, DHSC assumes that the number of overnight beds will rise by an average of 6%. To help it size new hospitals, DHSC now uses a more rigorous and transparent demand model, replacing earlier unrealistic assumptions that risked undersized buildings. The new approach is peer-reviewed and assumes a 92% bed occupancy, not a riskier 95% where hospitals would have less spare capacity for winter pressures, surges, or unexpected events. However, the model depends on a major shift of care into the community for its assumptions to hold.

DHSC estimates a £3.10 return for every £1 spent under a centralised programme, compared to £2.70 if individuals trusts built their own hospitals - delivering up to £7.5 billion more in measurable benefits. These potential benefits include better emergency and ambulance performance, digital technology benefits, and reduced hospital infections due to patients having their own room. If successful, DHSC expects to secure operational benefits from the 2030s, when the first Hospital 2.0 schemes open.

Since the new plan and funding commitments were announced, the programme has had expressions of interest from over 20 potential main contractors and is taking 16 pre-qualified bidders through ‘competitive dialogue’ to help them develop solutions and technical specifications prior to submitting final tenders.

The construction schedule over the next few years is challenging as hospital schemes adapt to the new approach. If early schemes fall behind, there are risks of delivery dates slipping and work may bunch up later. This could lead to budget pressures on later hospital waves.

The programme also continues to face workforce challenges. As of November 2025, NHP had 138 vacancies out of 357 posts, a vacancy rate of 39% for public sector roles with gaps in digital, legal, commercial, project delivery and technical roles. The programme rated the risk of delays due to vacancies as Red (most serious).

 The National Audit Office (NAO) has several recommendations for DHSC and the New Hospital Programme, these include:

• Maintain rigorous programme oversight to keep delivery on track, learn lessons between schemes and respond to changes in healthcare needs.
• Get the Hospital 2.0 design right by allowing enough time for testing and ensuring strong input from trust staff and leaders.
• Strengthen long‑term cost estimates and align delivery and funding profiles, weighing any acceleration of schemes against delivery risks, industry capacity and price pressures.
• Share the future demand model widely across the NHS and government, ensuring consistent local decision‑making and continuous model refinement.
• Monitor the shift to community care closely to avoid under‑sized hospitals, refining demand assumptions and developing clear contingency plans across the wider health system.

Gareth Davies, Head of the NAO, said: “The reset of the New Hospital Programme gives the Department a firmer platform to deliver long‑term improvements, and its ambition to transform hospital infrastructure has real potential provided designs are rigorously tested and programme delivery is well managed."

Read the full report here.

Read the PAC Chair Statement here.

Picture: Image of the New Hospital Programme.

Article written by Dave Mapps | Published 30 January 2026

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