Welcome to the Public Accounts Committee on Monday 9 February 2026. This afternoon we will take oral evidence for two separate inquiries, the first of which focuses on the New Hospital Programme. In 2020, the Department of Health and Social Care committed to building 40 new hospitals by 2030 through the New Hospital Programme. This was intended to be a landmark programme to address the growing backlog of investment in hospital buildings. When the Committee last reported on this subject, in 2023, we found serious doubts that the Government would deliver on their promises, and that swifter action was needed to address dangerous crumbling and RAAC in hospitals. In January 2025, DHSC announced an updated plan for delivering a total of 46 new hospitals, including five that were already open. These hospitals are to be delivered over a longer timetable, with proposed funding of £60 billion—double what was previously proposed—and the programme extended from 2030 to 2045. Today’s session will be an opportunity to assess the realism of the revised New Hospital Programme, challenge the Department on the impact of delays and explore the risks to long-term delivery. It is essential that patients and all who work in the NHS have confidence in the delivery of this plan. To help us with this, we are pleased to have both the permanent secretary and chief executive officer with us from the Department. Samantha, would you introduce yourself first—and then Sir Jim, Elizabeth, Paul and Charlotte, please?

Good afternoon—thank you. My name is Sam Jones. I am the permanent secretary at the Department of Health and Social Care. I ask the Committee to note that my husband is chief executive of Milton Keynes hospital.

We recognise that potential conflict. We will not be asking any questions on individual projects in the south-east of England. Thank you very much for that, and thank you for being here.

I am Jim Mackey, chief executive of NHS England.

I am Elizabeth O’Mahony, interim DG finance at the Department of Health and Social Care.

I am Paul Mustow, the joint SRO for the New Hospital Programme in DHSC.

I am Charlotte Taylor, the other joint SRO for the New Hospital Programme, also in DHSC.

A warm welcome to Paul and Charlotte on your first appearance. Hopefully you will find it useful and worthwhile—I was going to say enjoyable. It falls to me to ask the first question, probably to you, please, permanent secretary. As I said, we now have a programme for building 46 hospital schemes that will be delivered by 2045-46 and cost no more than £60 billion. How much confidence can the Committee have that this massive programme will be delivered, and that it will be delivered on time and on budget?

We hope this afternoon to take the Committee through the steps that we have taken on the improved governance and assurance around the programme. We were particularly pleased to have the NAO’s recognition of the reset, so to speak, of the programme more generally, in terms of both the approach to the RAAC hospitals and the phasing and additional investment that has been put into the programme itself. We are confident that, as the NAO has outlined, we have a positive reset and a look forward. Having said that, we do not take it lightly. We take the seriousness and the size and scale of the programme very seriously. We have revised governance arrangements in place, particularly through the transition, which I know you will want to come on to in more detail later.

I have a question on the RAAC hospitals. You may or may not be aware that the Committee visited Hinchingbrooke hospital in Huntingdon and West Suffolk hospital near Bury St Edmunds, both of which have RAAC. At that time, it was felt that those hospitals only had a life until 2030. You have now had Mott MacDonald do a report and extended the life of those hospitals to 2032. Is that realistic, and are you realistically going to be on time in replacing all seven RAAC hospitals within that timetable?

I will start and then hand over. I think we would all say that we do not take the issue of the RAAC hospitals lightly. We take the issues of patient and staff safety, and governance, incredibly seriously. That overrides everything that we do, including having the independent assessment through Mott MacDonald, which confirmed that those seven hospitals are safe until 2030 and onwards. I will hand over to Charlotte and/or Paul.

We certainly welcome the report, which suggested that all the work that has gone into mitigating RAAC in those hospitals has been successful. A huge amount of time, effort and money has gone into mitigation work at those hospitals, which has meant that they are safe to operate beyond 2030, and potentially for six to 10 years after that, as long as they are well maintained, monitored regularly and kept up to scratch. But we recognise that that still puts an imposition on the trusts that are running those hospitals, and we are absolutely clear that we have to replace those hospitals as soon as we possibly can. We are now following the plan for implementation that was published as part of the reset.

I do not mind who answers this—perhaps it is your bag, Sir Jim. The Report makes it clear that you have smaller contingencies in the earlier years, building up to bigger contingencies in the later years, but the simpler projects, if there is such a thing—the smaller projects, anyway—are in the earlier years, and the bigger, more complex ones are in the later years. What reassurance can you give the Committee that the smaller earlier years projects are not going to run over those contingencies, which are pretty small in some cases, and create a knock-on problem for the much bigger hospital projects in the later years?

I will start off and then hand over to Paul. I think that is covered in the revised governance arrangements and stronger oversight as part of the reset. There will be clearer and more agile oversight as things develop, more regular reports and more kicking of the tyres to make sure that plans are realistic, and then our ability with other schemes to nudge them back or forth to accommodate any movements.

The key benefit of running it as a programme is that we can look at contingency across the programme as well. The NAO flagged that there is around £12 billion of contingency across the programme—about 20% of the capital cost. Of that, £8 billion is centrally held, to be allocated across the schemes, and we expect that contingency to be used more towards the middle and later periods of the programme—into waves 1 and 2—hence the lower contingency figures across the first five-year period, which then grow over the following five-year periods. That is in line with the expectation around spend and the nature of the schemes in the programme.

Will you be keeping a very close eye on it, so that we do not get the knock-on effect that I was talking about? If it starts to go wrong in the first few projects, it will be wrong for the rest of the programme.

Absolutely. It is a full programme. While it is divided into waves, principally to match the funding requirements over those five-year periods, we will manage it as a programme, and those schemes flow from wave 1 into wave 2, and from wave 2 into wave 3.

I should declare that one of the hospitals in the programme is in my constituency. Paul and Charlotte, what are the key challenges that you face in delivering wave 1 of the scheme to time and budget?

We should be clear that wave 1 schemes are big and complex, particularly compared with a number of the schemes that are currently being delivered through wave 0. There is an inherent risk and complexity there, just through the nature of those schemes. As we have talked about, seven of those are RAAC replacement; typically, that means almost all the buildings, rather than part of an estate, needing to be replaced. We are looking at what estate can be retained and does not need to be completely replaced, but typically more is needed there. It is sort of the nature of the beast of them being in wave 1 that makes them generally bigger and more complicated.

The Report makes it clear that the biggest projects are towards the back of the programme. The projects in wave 3 and onwards are the bigger ones—is that right?

They do get bigger throughout, broadly, yes. It is not a straightforward curve, but they do tend to get put towards the back end. That is partly because in the review of the programme, one of the factors that was looked at was deliverability, and the bigger schemes are the more complex to deliver. They are further back in the waves system, but hopefully they will get to benefit from the learnings of wave 0, and the delivery of the wave 1 schemes should enable the wave 2 schemes and, in turn, the wave 3 schemes to be delivered more effectively.

The new hospital design, which some of the wave 1 hospitals are going to be built to, has a re-estimated completion date of spring 2026. Are you happy and confident with that timing?

Yes, we are. Hospital 2.0 has been developed over the last few years. It has been iterated, developed and extended, and this summer will mark its full completion and mandation, which will mean that we have been through all the assurance processes needed and are mandating it as part of the design of future hospitals. That is not to say that that is the start point. The design has been with trusts for some time, and they have already been using it to develop their business cases. We have been refining it and going through the independent assurance process up to that point.

Great. Paragraph 2.9 of the Report states: “Some of the RAAC hospitals appear to be facing timetable pressures”. Is there anything that you want to touch on in that regard?

As Charlotte mentioned and you will be aware, all seven of the RAAC hospitals are large, complex schemes, and they are working their way through their business cases at the moment. They are at either strategic outline case or outline business case, which are two of the early stages, but they are absolutely key stages, where the size, scope and cost of those hospitals will be finalised. We are working through that process at the moment. We are on track with those, and we are on track for the start on construction dates currently that are in the plan for implementation. While they are complex and things can change, we feel that we are on track with those at the moment.

That leads me nicely to paragraph 2.2, which states: “Hospital schemes take years to develop.” Figure 5 gives a really good and helpful indication of the breakdown of that timing. It says schemes require an average of eight years, with a range of six years to 10 years. Could you elaborate a little on what might cause a hospital to be at the six-year end of that spread versus the 10-year end?

As you say, it is quite a wide range, which represents the range of different types and sizes of schemes, and different complexities, such as whether additional land needs to be purchased or whether the hospital is being completely constructed on site. There are just a number of different circumstances that could lead a hospital to need a longer completion time than some of the other schemes.

I do not have a hospital in Mid Bedfordshire—if you want to build a new one, you know where to come. My constituents rely on the hospital in Milton Keynes, which I will not ask about, for the reasons we discussed earlier, but also Bedford hospital and Luton and Dunstable hospital. Between the two of them, they have a maintenance backlog—I think this is the latest number that I saw—in the region of £170 million. More broadly—I am not just focused on Mid Beds—how do you plan to ensure that hospitals outside the new programme get the investment they need to operate effectively for people such as my constituents, who rely on hospitals with a very high maintenance backlog?

Following the spending review, we have had confidence and clarity around the capital. Essentially, of a £70 billion envelope over the time period, the New Hospital Programme is about 13% of the total spend. Outwith this, we have a revised capital strategy, whereby a lot of this capital is going straight to providers to support not only backlog maintenance but some of the transformational work that we have ongoing. Through the new regional delivery model, we also have an opportunity to shape a more strategic response to some of the clinical strategies.

I am quickly trying to see whether I can get the estimates. The RAAC trusts will receive in total—across all of them—about £440 million of operational capital to address local infrastructure issues. Clearly, we are working very closely with the providers to try to find the most cost-effective solutions. Our preference would obviously be to build the RAAC hospitals sooner, but as Charlotte and Paul have described, the delivery speed is very much constrained by market capacity. If we go a lot faster than originally planned then, with the funding profiles, it is likely to push up the cost, so that is the approach we have taken.

We do; we are contracting with the market in a very different way under the New Hospital Programme. We are out to procurement at the moment for our own contractor framework, which is looking to extend the capacity of the market. We have been very pleased with the response we have had from the market and the volume of contractors that have put themselves forward. We are looking to take 10 contractors forward into the framework. That will be awarded in the next couple of months, and we will start to be able to allocate contractors to schemes. That brings in additional capacity from Europe, for example—large European contractors that are already building hospitals on the continent. That, combined with UK capacity, will give us the capacity we need. The other key thing to mention is that the way the standard design works is that we are able to consolidate the need across all of the hospitals in the programme and start to put that out to the supply chain and the market in a different way, giving confidence in the pipeline of work that is coming and allowing firms to gear up and scale up to deliver all the key components of the hospitals that we will be building. We have a very different approach to the market, and we have confidence that that is building the capacity we need, but we recognise that it is still a very challenging market in the UK, alongside all the other things that are happening in both the public and private construction industry sectors. We are working very hard to build the capacity.

Absolutely. Even though, as I mentioned, they will be bringing in additional capacity, they will still use local suppliers. A key part of the framework is that social value is at its heart. That will be around skills and training, and we have an academy that we are developing that will develop the skills for those roles. It also develops the local supply chain. The big contractors will subcontract out key components, which will also be sourced locally. These hospitals have a big footprint locally, and in the local and national economies, so we are looking to leverage that as much as possible.

I will start by outlining some of the feedback and the engagement that has gone into developing those designs, and then Paul might have some more technical points to add. The designs have been really carefully tested and probed, and shared with clinical leadership, including allied health professionals, such as the Chartered Society of Physiotherapy and specialist organisations including patient groups and patient voice groups. You mentioned dementia, and there has been some work with dementia organisations on things such as what we call pathfinding—being able to navigate your way around the hospital in a sensible way. We are making sure that that is built into the designs from the outset. The hospitals are intended to be much more intuitive than hospitals at the moment. At the moment, typically when you go into a hospital it is a mishmash of buildings that have been added over time and it is not always easy to find your way from the front door to where you need to go. By building that into the design from the start, they should be much more user-friendly.

It is both. If you look at Hospital 2.0 as a system rather than a design, it is all the way from clinical requirements and working with clinicians, patients and staff, through to building designs and operational procedures. It is the whole thing; it is a system. As Charlotte mentioned, it has been extensively tested and developed with users, clinicians and stakeholders. It has then been unpicked and unpacked to work with the market—contractors, suppliers and subcontractors—on how best to build and deliver it. It is also then plugged into the operation of the hospital. A big component of Hospital 2.0 will be the digital component. How those hospitals will be used in future and which digital technologies are rolled out through the system will all help with that process of keeping it future-proof and thinking about future use.

Yes, absolutely. A key part will be learning lessons as we go. We will be building in waves, and we will be able to learn lessons from the waves that have been completed. As they go into operation, we can learn lessons further from those into future waves. As you will know, each scheme will have its own business case. As we go through the business cases, in later years, we will be able to adapt those and incorporate the lessons learned so that they have learned from the past and are fit for the future.

Perhaps we will all come and visit.

Paul, I believe that you are a chartered engineer. This is a big, rapid programme: 41 hospitals in the next 20 years. Is there going to be sufficient building and skills capacity out there to deliver that size of programme in that timetable?

I think we have touched on that a little bit already. The capacity is a challenge. That is why we have taken our approach to procuring the contractors and to a different way of contracting. It is called the Hospital 2.0 Alliance, which we are developing. It is very much working collaboratively with the supply chain and with contractors to make sure that risks are properly apportioned between us as the clients and the contractors. That is attracting more contractors back into the health market, whereas we had seen contractors leaving the health market before. It is elements like that. It is the standard designs, which, as I mentioned earlier, give contractors a good view of the future—of the pipeline of work—and can give them confidence that this is coming and is worth investing in. It is a combination of those things that we have put in place. That said, it is still a complex and challenging market. We are keen to make sure that contractors and the wider supply chain see building hospitals as a really valuable and worthwhile thing to do.

You are a chartered engineer—I declare my interest as a chartered surveyor, so I know how to build things. Are you confident that, when you are ready to press the start button for each of those projects, all of what I call the pre-contract issues will have been resolved on each project? That is things such as planning permission, specifications, designs and even pre-contract work—demolishing the old buildings or whatever it is. Are you confident that each trust is working up and knows what those pre-contract works are so that, when the button is pressed, the contract will be properly tendered and ready to go?

Yes, that is the plan. The plan we laid out in the plan for implementation sets out the envelope of start dates. We have put a range of start dates as an envelope, because they are still relatively early in their business case journey. As we move towards the outline business case and then full business case, the cost and the final programme will be tied down. That approach gives us the certainty we need for the individual scheme programmes, but in the meantime we work closely with the trusts to understand the specific needs of their site, whether that is a hospital staying on its existing site and needing to do masterplanning or a scheme where we are looking to purchase a new site to build on from scratch. Those are very different, as you say, and the planning requirements are very different. Each one will have its individual attention and we will work closely with the trusts to ensure that those plans are realised.

Perhaps I should say that that work is happening in the wave 1 trusts; for example, building car parks—or a helipad, I believe, at King’s Lynn—or demolition work. A lot of enabling works, as we call them, are going on across wave 1. Indeed, in some cases, some wave 2 and 3 schemes are also undertaking that enabling work where it is sensible for them to do so.

King’s Lynn is one of those where the multi-storey car park needs to be demolished. Has that actually started now?

It has not started yet.

When will it start?

Later this year.

NHS England is being abolished, with its functions rolled into the Department. Therefore, there is a recruitment freeze, as I understand it, at NHS England. Those are hardly the ideal circumstances to embark on a major new programme, are they?

We have a revised set of governance arrangements in place now, and we will have them through the transformation programme, including with Elizabeth as the interim director-general, with responsibility to me and Jim directly for the New Hospital Programme. In any scenario, there will be a director-general for finance, who will be responsible for the programme. NHS England also has a board chaired by a non-executive director, with programme management structures underneath. On the arrangements for individual staff and the staffing of this programme moving forward, we will be flexible on the type of skillsets that are required between now, this year, and next year. We will be going through the detail of what type of skills are needed to make sure that the programme is delivered in the way that it needs to be delivered. That is what Elizabeth will be taking forward.

There was a slight pause, but actually we are not delaying recruitment into specific roles in the New Hospital Programme. We are working very closely with the team. We are looking at key priority roles, so we have been recruiting into those. We have also been trying to move from a more outsourced model to an in-house model, recognising the longevity of the scheme, so we are building that skill and capability. Some outsourced roles we will continue with—that seems very appropriate given the nature of the work. There are some technical and commercial skills where it makes sense to buy those in. That work is ongoing. Also, if I may, as a consequence of the 50% headcount reduction in core NHS England, we are looking to see whether some existing staff within core NHS England would have the skills, as we pivot into delivery, to move across into some of the new hospital vacancies—making sure we do not make people redundant who have the skills that we could redeploy into the programme.

Therefore, no vacancies currently affect the New Hospital Programme.

There are no vacancies at the moment—no key roles that we are looking to fill. Some roles we have gone out to advert to fill, and we have not been able to fill them immediately, so we are going around the loop again.

There is none where there is actually a freeze in recruiting.

No, not for key roles. No.

Potentially, therefore, you have got as far as you can in being able to recruit all the staff necessary to advance this programme.

Yes—and/or, if we cannot recruit, because people have not applied or they do not have the appropriate skills, through our delivery partner, we are working to fill those gaps in the short term. But I do not see resourcing as a concern at the current time for delaying the programme.

May I challenge that? I am sure that what you are saying is right, but paragraph 3.29 on page 48 of the Report says: “The risk of the public sector vacancies on deliverability is rated ‘Red’, and capabilities impacted include digital and IT, legal and commercial, project delivery, technical and industry knowledge, and analysis.” Are you really saying that you do not have a shortage in any of those skills?

At the time the Report was written, we had key gaps. We have been on a recruitment drive, and we have been looking at how to move staff across from within NHS England into core roles. I spoke to Natalie Forrest, the lead of the programme, to double-check before I came in today, and she said that, of course, we would like to fill all our vacancies, but we have filled all the key roles at the current time to deliver this programme. At the time the Report was written, our vacancy rate was 39%. That has subsequently reduced. We will continue to recruit in the same spirit, and we are recruiting the SRO role for the New Hospital Programme.

Thank you for that clarification; that is really helpful.

That is at the heart of the neighbourhood development and the 10-year plan development. Colleagues are working on that, as we discussed last time, in the medium-term planning process. They are starting to build the frameworks and the foundations to shift care in the way that you have described. The planning process for the New Hospital Programme has to be adaptable to local circumstances. The hospital modelling has to understand what is being built outside hospitals and changes to pathways, which is one of the strengths of the project.

We have to connect up all these things. There is capital investment for neighbourhood schemes. We are expecting colleagues in the service to get the investment decisions right to start building services to prevent patients from having to go into hospital and can be cared for more locally. It is our job to join all those things up in the approvals process with local ICBs and trusts, and in our regional teams. We will also get involved if it looks as if it is out of sync.

I am very happy to, and I echo what Jim said. The hospitals need to sit within that ecosystem and reflect the shift to the community, and the left shift that you will have heard of separately. One of the key elements for us is the demand and capacity modelling work that goes into the business cases for each hospital. That looks at the right size for the hospital, bearing in mind both factors that push the growth in size and factors that push the reduction in size for moving things out to the community. That is all factored into our demand and capacity modelling. The last time the NAO reported, there was a concern that hospitals would be too small. That has been addressed through the demand and capacity work. Now, the emphasis is again on making sure that there is the right balance between sufficient capacity for the future, correct interaction with the system and the shift towards neighbourhood and community. That all goes into the work behind the business cases for each scheme.

I cannot claim to understand the detail of the model; it is very complicated. However, the Royal Statistical Society awarded it the Florence Nightingale award for healthcare statistics, so I think that they understand what is behind it and have tested those assumptions. We do not just do the demand and capacity modelling once and then say, “Right, that is the number that goes into the scheme”. It is repeated at various points throughout the process. As we have said before, it is quite a lengthy process to develop a hospital, so we keep doing it to check the numbers are still right, that the assumptions that have been made are coming to fruition, and that we are learning lessons from the hospitals that are a bit further down the line. As Jim and Paul both said, in the whole ecosystem, everything needs to work together. That is our job, to ensure that it is happening properly.

When it flows through the governance system as well, it will not all sit within the projects. There will be different levels of challenge; as it comes into the joint exec team, and then eventually flows into the NHS England board or departmental governance, there will be other challenges. That is where we would expect to be really challenged on whether we are being over-optimistic, and therefore whether it will fail later on.

I have looked at the model and it is good. There is a lot of scenario planning in it. We are trying to have a real-world reality of what it looks like if we do not get the left shift, and what it looks like if we do. That is, I think, the benefit of Hospital 2.0, because it is not a single rigid specification. It is something that you can adapt to demand and the clinical model. There is some non-clinical space built into the hospital designs as well, so there is an opportunity to flex. We are very alive to that, because, as you say, we cannot have history repeating itself.

Talking about flex, does each hospital have its own business plan and probability ratio, or is it the same ratio applied across the whole hospital building programme?

I don’t know the answer to that.

I think some of the factors will be consistent, so things like bed occupation and utilisation will be consistent. Other factors, such as demographic growth and the nature of the local population, will be different. We can explain all of that in a letter, if you would like us to write to you on the nature of the model—

Yes, if you could. This is the Treasury model for managing public money that sets out how these P numbers ought to be. I am interested in whether there is one for the whole programme or whether there are different ones for each project.

We will come back and confirm.

Thank you very much, permanent secretary.

Just following up, I still have not quite got my head around figures 12 and 13 in the Report. Bearing in mind the Secretary of State’s mission to transfer care from hospitals into the community, figure 13 indicates reduced length of stay, more care in the community rather than in hospitals, and higher bed occupancy, yet figure 12 shows more hospital beds. The two do not seem to sit alongside each other.

I will start on that. In terms of growth, as I mentioned, when the NAO looked at the programme in 2023 there was a concern about over-optimism, which was driving hospitals to be smaller. We have gone back and reviewed all the inputs to the model, including reducing bed occupancy from 95%, which was seen as overly optimistic, to 92%, which is seen as more standard. That has pushed bed numbers up by, on average, around 6% across the programme. That has felt reasonable in addressing future-facing potential demand and in thinking about future demographic growth. The flipside, as we mentioned earlier, is working individually through each business case to look at the local ecosystem and what can be moved to the left, and what can be moved outside hospitals into the community. That work is built into the business case process for each of those schemes. You will notice that the NAO has picked out some numbers for individual schemes. For example, figure 12 shows a significant increase in bed numbers in Leighton, but it is already working those numbers down as part of its business case process. We expect that there will be an increase in bed numbers but it will not be as large as the percentage shown there when it is locked down in its full business case, which will be in a little while.

So there will be more beds than there are now?

Across the hospitals, yes.

Why, when we are trying to move care into the community?

Generally the biggest variable in these sorts of models is underlying growth. We are making lots of changes to patterns of care but there is an underlying growth in demand anyway. The changes have to outweigh that demand and go further to reduce beds overall. There will be specific local circumstances that will also drive specific issues in the model.

Therefore, the idea that we are going to fund an increased demand for community care and primary care by reducing spending on hospital care is not likely to happen, is it?

Generally, it is still a big part of our plan and part of the 10-year plan. This is one specific component of that plan, but it is still generally the intention that we will go beyond underlying growth and actually shift the patterns behind that. We have not yet set specific objectives for the service in quantifiable terms—reductions for neighbourhoods to deliver in percentage terms—but that is our aim. The challenge we have is that nobody has actually managed to do that at scale yet.

The obvious place to start is by providing fewer beds in new hospitals, isn’t it, if that is where we are going to do the transfer?

I think there is a staging point as well. At the point that the new hospital programme bed numbers have come through from individual sites, the approach to neighbourhood health services is clearly in development. We are going to do a bit of work in the demand and capacity review to see if these are the right sizes for hospitals or whether we can do them on a smaller base at a reduced cost. That further work would happen on a scheme-by-scheme basis.

So these figures are not definite yet?

We have an envelope. The figures are indicative, at the start of the process, but we are going to continue to work on a site-by-site basis.

The other bit to add—which I am sure will go into the next session—is about the model of care associated with delivering the shift into the community that was set out in the 10-year plan. In that model there is a focus on those individuals who are better treated outside of a hospital, as opposed to those who need to be in a hospital. That does not take away Jim’s point about the underlying demand, but neighbourhood health is about a model of care that treats people and keeps them as safe as possible in the home. I know that we will come on to frailty in a bit more detail.

Is all that work going to be done by the time you actually decide what the size of these new hospitals should be?

That work is quite significantly under way already, in terms of what a model of care looks like from a frailty perspective, how many people there are, and where they are best treated. On top of that, as Jim said, we are bringing together the plans for hospitals and for what is going on in the community and cross-referencing to make sure there is a local system that actually makes sense. I am sure that Jim or Elizabeth will talk about the medium-term planning framework.

Clearly some of these schemes are happening in the next three years, so through the medium-term planning process we are testing, from both a revenue and capital perspective, the assumptions on the bed capacity and the models of care; we also have some out-patient work under way. Effectively, we are testing those clinical strategies against the programme business cases that are starting to come through. But, as Charlotte and Paul described, some of that work will start in earnest, with the indicative envelopes starting in wave 1, from April.

Wave 1 will have indicative envelopes for cost and broadly for size, but that will get refined throughout the business case development process.

It is also worth emphasising that it is not a static process. In previous regimes, there would be a number fixed for beds and then whatever happened to that number became the excess that you had to manage. This will be constantly reassessed, right up to the point that things are pinned down contractually, with a degree of flexibility to then adapt as well.

There is a lot of work to do, isn’t there?

Absolutely. It is never at the opening. I have been involved in building a lot of hospitals and you never get it absolutely right. The question is how you adapt to changes in real life as the thing is opened.

Mr Mustow, you were talking about Hospital 2.0 to my colleague Anna Dixon. When they start to be implemented and used by patients, what metrics will you use to measure whether they are delivering improved patient care and workforce wellbeing?

Thank you for the question. As I mentioned earlier, it is a system. We are looking to build the clinical benefits into the design from the outset and that then runs into the operation of the hospitals. We are looking for the benefits around shorter stays from being in single rooms, for example, or improved figures around hospital-acquired infections. We will be looking to measure and monitor those going forward and make sure that the benefits are being delivered. As part of the business case, and as in the NAO Report, we estimate that there will be about £7.5 billion of additional benefits from a combination of all those things from the programme.

So the shorter stays and reduced infections are part of that £7.5 billion?

They are. It all adds up and the design and construction, along with the operation, gets rolled into those additional benefits. We are also learning from schemes that have already implemented things like single bedrooms. The Royal Liverpool already has a single-bedroom approach. We are working closely with its teams to understand how it is working, including in terms of staffing, monitoring and utilisation. We are also feeding that into the design, so it will continually evolve as we go forward.

What have been the findings on workforce wellbeing with that single-room model?

It has been reasonably positive; I will probably see if Charlotte has anything to add. There is a staffing element to that, but also the wider use of the hospital and systems. The Hospital 2.0 design will add on top of that and will, for example, bring in new digital. We are trying to build on the best practice so far.

I can add a bit more colour to that. At the Royal Liverpool there have been some exercises to try and capture staff experiences. Those have been broadly positive, including from people who were sceptical, because, for example, it is a very different way of nursing. Staff are seeing the benefits of operating in that way, so clearly there are lots of lessons to be learned there. It is also worth pointing out that as part of the Hospital 2.0 standardised designs, we are mandating that about 6% or 7% of the hospital should be reserved for workforce spaces. If you talk to people who have worked in hospitals, they do not typically always have somewhere to go to sit down, have a drink or just have space away from patients. We think that is important given the lessons learned from other schemes and during the pandemic about having a supported workforce and how that helps you operate a hospital more effectively. We think that is a core tenet of the approach.

In Hospital 2.0 it is not so much that the single-patient room model is better for staff, but that elsewhere in Hospital 2.0 there are more spaces for staff and that will boost their wellbeing?

It is overall, but all those things come together.

What measures are you going to use to assess whether the Hospital 2.0 approach is delivering economic efficiencies for NHS trusts?

There are the actual running costs of the buildings, reflecting a more efficient and effective model and the approach that is being taken. We also look at some of the patient indicators that you talk about—length of stay, throughput, flow and infection—as well as the water systems that are used in Hospital 2.0. The model looks quite a lot more cost-effective. In terms of the running costs and some of the staffing metrics, we are overseeing—

Sorry to interrupt you. The model is showing you that it is going to be more economically efficient, but once they are up and running, how will you measure that it is delivering economic efficiencies?

We will be making sure that we are using the asset more efficiently—through throughput, effectively—looking at the standard productivity metrics that you would apply, and comparing it against standard operating models that are currently operating in our trust sector.

Just to add to that, it is similar to the quality impacts that were discussed earlier. As we get nearer to opening, our oversight regime needs to be a bit more sensitive to the specific aspects of these business cases, so that it is clear and more transparent as to what is being delivered versus what was planned, and that we can, through our oversight mechanisms, be able to respond if any of the key assumptions go adrift or are not quite having the impact that is described.

I can understand how this approach will obviously reduce infections and hopefully reduce hospital stays. Will you have a mechanism in place to capture whether there are unexpected downsides to this approach, Sir Jim?

I hope so. On your experience point, the NHS England board just resolved to proceed with building a systematic approach to patient experience, and we will appoint a new patient experience director as soon as we can. We are also keen to extend the staff experience work to bring more data and more real-time analysis to what is actually happening. You make a very good point. Around the UK, there are examples where you can deliver the core aspects of the scheme and the core assumptions hold, but some unpredicted or adverse consequences become apparent. That is all going to be down to us in our oversight regime—local oversight, board oversight, our oversight mechanisms and connections with others in the system. It is easier to see if it is in a hard metric, such as infection rates, ED performance or discharge rates. It is a bit harder if it is experiential, so we need to get these other mechanisms in place.

We will look at this carefully and see where we get to with our Report.

This is the final set of questions. You will be aware that some hospital trusts have raised concerns about the new design perhaps being more expensive to run than existing hospitals. Can you walk us through how you are addressing NHS trusts’ concerns that the new hospitals will be more expensive to run? This might be one for Paul and Charlotte.

They can pick up on how they have dealt with those kinds of responses first, and then Elizabeth and I can pick up on what we do about it.

Yes, we can start.

Briefly, please, because the clock is going and we have a lot to get through yet.

The programme is developing a standard operating model—how the hospital will actually work—and then developing a target operating model with the trust. This is part of the overall business case process. As well as working out how big the hospital will be and how many beds it will have, the running costs will be part of that assessment—making sure, as part of that assurance process, that they are economically viable schemes to run.

Do you have anything further to add, Paul?

No, I think that was it from the programme level.

One of the common things that comes through with, for example, single rooms—I worked in a couple of hospitals with very high rates of single rooms—is that they generally get very good satisfaction levels from patients, and staff enjoy working with them, but they are a bit harder to staff and can be more expensive to staff, certainly in the short term. The Royal Liverpool has reported that to us in our general discussions with it about the financial position and so on. It is quite confident that it will level out over time, and generally you can level out, but it takes a bit of getting used to. We will be all over this, through the oversight regime, and when colleagues flag something as a specific issue in terms of running costs, we will have to work with them to try to resolve it.

For those of us who do not work in this industry, can you explain how you expect it to level out over time? For me, if you have a hospital with 500 beds, you always have a hospital with 500 beds. How does the staffing level out so you can get better value over the long run?

Generally, the issue at first is observation. Sam was a nurse so she can chip in—your oversight of patients is easier if you are in a bay where you can observe more patients. Behind closed doors, that is harder and it is also a bit unnerving for staff initially—they have to do more checks and be more structured around the checks. That can produce extra costs in the short term, until you develop the model that allows you to do it on a like-for-like basis.

Which is where the digitisation comes in. Jim is absolutely right: when you are used to working in a different way in a ward where you can see people, and then you move to single rooms, you are relying on observations that are given to you in a different way—using the digital and making sure that the information comes through. It is about supporting the staff on the change as well. We have models up and down the country and globally where that is very normal.

I have a feeling that Anna may want to come in with a question.

Very briefly; the time is going.

You are right about the risk, but you still have to go in and see a patient; you still have to be able to talk to them. That still absolutely happens. But what it does help you do is identify the people who need to be identified and to have that access more quickly. The productivity associated with it does not take away from the human contact. You absolutely have to go in.

I have two quick questions, then we will finish this session. First, how will you keep Parliament informed on the start and completion dates of each of the 41 hospitals?

In whichever way you would like. We can either do that on an ongoing basis or a quarterly basis, update you on the programme or do that on the specifics.

We will think about that in our Report, if we may. Finally—a short, quick question—the Committee has been to Denmark, where they have literally bulldozed all their regional hospitals and built nine major hospitals, with fewer hospital beds and all to a standard design. Have you sent teams over to Denmark to look at all these things?

We have.

What lessons have you learned?

There was a DHSC trip to Denmark in, I think, the back end of 2023, looking not just at hospitals but at the wider changes that they had made to the health system more generally. A specific thing they learned was that the team delivering the Danish super-hospital programme wished they had done more on standardisation. They had built all the hospitals individually. They very much thought standardisation is the way, and that if they were doing things differently, they might look at that. The broad point with international comparisons is that it is really hard to compare like with like. The country, demographics and size are so different from England that there is a limit to some of the things that you can learn from these trips.

The key difference between what we have discussed today and what they have done is that they have ended up with nine major hospitals with fewer beds than they started with, because, presumably, they made greater assumptions about care in the community. It would be really helpful, permanent secretary, if in addition to your note on finances we could have quite a detailed note, because absolutely critical to this programme are the assumptions you are making about the size of these hospitals, the reasoning behind it and the research you have done. I thank you all very much for today. Some of you will remain for the next session on frailty; to the rest of you, I thank you very much for your time.