The New Hospital Programme Reset: What’s Changed?
April 2026The New Hospital Programme was originally presented as a plan to deliver 40 new hospitals by 2030. However, a review commissioned by the Government following the July 2024 General Election and conducted by the Department of Health and Social Care revealed significant funding gaps and delays within the Programme. The review’s findings were published in January 2025.
As a result, the Government has reshaped its approach to the Programme, replacing the original single deadline model with a phased long term delivery strategy intended to bring greater certainty and deliverability.
Key takeaways
- The New Hospital Programme has been reset following funding and delivery concerns.
- A phased funding model and standardised ‘Hospital 2.0’ approach now underpin delivery.
- While the reset improves certainty, risks remain around capacity, timelines and supply chain delivery.
Programme background
The review by the Department of Health and Social Care identified fundamental weaknesses in the way the Programme had been defined and presented. In particular, it confirmed that the headline commitment to deliver 40 new hospitals included a significant number of schemes that were not new-build hospitals, and that the Programme was already subject to delays extending beyond those previously identified by the National Audit Office.
A critical finding of the review was that funding had only been secured up to March 2025, with no confirmed provision beyond that date. As a result, schemes lacked the financial certainty required for delivery. The Programme was therefore considered to have been established without a sustainable funding basis, undermining its deliverability.
The review emphasised the deteriorating condition of the NHS estate as a key factor underpinning the urgency of the Programme, citing evidence of significant structural failures and maintenance issues. It also highlighted the scale of historic underinvestment, estimated at £37 billion over the 2010s, and concluded that this had constrained the capacity and readiness of the UK construction sector to deliver a programme of this scale within the original planned timeframe.
Resetting the Programme
In response, the Government has committed to delivering all schemes previously included within the New Hospital Programme, but under a revised and phased delivery model. Central to this reset is the introduction of rolling five-year ‘waves’ of investment, designed to provide a stable and predictable funding envelope.
Under this model:
- Each wave will define construction start dates over a five-year period, whereby approved schemes are expected to commence main construction once approvals and funding are confirmed.
- Schemes may complete in subsequent waves, allowing overlap in delivery.
- Projects may continue preparatory work ahead of their assigned construction wave, including business case development, planning and enabling works, subject to value for money assessments.
Once the Programme reaches a steady state in the early 2030s, it is then expected to operate within a funding envelope of £15 billion per five-year period, equating to approximately £3 billion per annum.
The reset also reflects a significant increase in the overall cost. Total funding is now estimated around £60 billion, including £56 billion of capital expenditure and a £12 billion contingency allowance to address inflation, market pressures, engineering complexity, and environmental requirements. This represents a substantial increase on earlier assumptions made. Capital funding of £28.9 billion has been allocated for the 2025-2026 year.
Risk prioritisation
A key priority remains the replacement of reinforced autoclaved aerated concrete (RAAC) used in hospitals, due to the material’s structural risks, the full extent of which became apparent in 2019 when the Programme was first announced. The NHS requested that the Government prioritise these buildings. The Government therefore treated seven affected hospitals as a priority, although revised timelines indicate that replacement will extend beyond the original 2030 target, with completion now expected from 2032.
In the interim, substantial expenditure has been required to maintain operational safety, with over £500 million spent by 2025 on mitigation works, and with ongoing annual maintenance costs estimated between £100 million and £140 million.
Standardisation
A defining feature of the New Hospital Programme is its shift towards a programmatic and standardised delivery approach, in contrast to the historically fragmented model of individual hospital projects delivered by NHS trusts.
The New Hospital Programme has also been closely associated with the Hospital 2.0 model, which was developed as part of the original Programme. While the model itself has since been recognised as requiring some refinement, the Government has reaffirmed its commitment to its core objectives including standardised design, improved productivity and buildability, economies of scale, and enhanced value for money.
The model incorporates modern methods of construction and design for manufacture and assembly, with the intention of accelerating delivery and improving consistency in quality. It also enables iterative learning across schemes, allowing lessons from completed projects to inform subsequent developments.
In addition to construction efficiencies, the standardised model includes operational features such as single-patient rooms, reduced staff travel distances, and integration of digital technologies including electronic patient records and monitoring records and systems. Across 28 Hospital 2.0 schemes, an average increase of 6% in overnight bed capacity is anticipated.
Procurement
The reset places significant emphasis on market engagement and supply chain certainty. The transition to a rolling programme of work is intended to provide contractors with long-term visibility, supporting investment capacity, skills and innovation.
This approach has been formalised through the establishment of the Hospital 2.0 Alliance Framework, with 10 contractors appointed including Bovis, Dragados, Kier, Laing O’Rourke, Morgan Sindall, Sacyr, Skanska, Willmott Dixon and Integrated Health Projects (Sir Robert McAlpine/ VINCI).
The alliance model provides a collaborative delivery framework bringing together the Department of Health and Social Care, NHS England, NHS trusts and industry partners. Although schemes may still be delivered using traditional contracting models at project level, they sit within an alliance‑style structure intended to improve coordination, consistency and efficiency across the Programme.
When the Programme was first brought to the market, contractor interest was strong, with over 20 contractors initially expressing interest, and 16 were shortlisted. However, capacity constraints have remained a concern, particularly within public sector functions. As of November 2025, the Programme reported a 39% vacancy rate in key roles, including digital, commercial, and technical positions.
Delivery outlook
The revised Programme now encompasses 41 hospital schemes to be delivered across four waves over approximately 20 years, with the final completions expected in 2045 / 2046. Five schemes had already been completed prior to the January 2025 reset.
While the reset has established a more credible and structured delivery framework, the Programme faces ongoing risks. The next five years are identified as critical, with a compressed construction schedule and limited contingency increasing exposure to delays and cost overruns.
The National Audit Office has noted that, while the reset provides a firmer foundation for delivery, successful outcomes will depend on rigorous design validation and disciplined programme management.
Concluding thoughts
The New Hospital Programme has undergone a significant transition from initially ambitious but underfunded commitment to a longer-term, structured infrastructure programme. The introduction of phased funding, standardised design, and alliance-based procurement reflects an effort to align delivery with both fiscal constraints and market capacity.
The successful delivery of the New Hospital Programme will depend not only on the appointment of principal contractors through the Alliance but the timely and structured procurement of the wider supply chain. This includes the engagement of consultants, specialist subcontractors and key suppliers under robust contractual frameworks that align with the Programme’s collaborative ethos. A particular focus will be required on the implementation of consistent flow-down contract provisions from main contracts, ensuring that risk allocation and performance obligations are effectively cascaded throughout the chain.
From the outset of the New Hospital Programme, specialist legal input has been central to shaping procurement strategy, drafting and negotiating contractual terms and ensuring alignment across downstream appointments. We have advised on contractual frameworks and risk allocation from the outset of the Programme, and are well placed to further support in navigating the legal and commercial complexities of the Programme and other large-scale public sector infrastructure projects. If you would like to understand how we can help you with your projects, please get in touch with the authors.
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