ERIC Data 2023: Unveiling the state of NHS assets

Trusts have faced what has seemed like a constant series of crises over the last few years including the COVID-19 pandemic, industrial action from staff, staff shortages, growing waiting lists and now an escalating financial crisis. For a system that has had years of capital underinvestment, these challenges have compounded so that the impact on clinical services across the NHS is tangible week in and week out.

A few weeks ago, in November, the capital budget was raided (again) to fund the cost of industrial action. This short-term approach to funding day-to-day overspends and shortfalls is well practiced in the NHS.

The ERIC data indicates a number of headline facts about the challenges that trusts have had to face. The total revenue occupancy costs across the NHS estate have increased by 11.7% to £12.4 billion. This has been driven by several factors, but the impact of the inflationary pressure stands out. This can be seen in the additional £416 million (53%) of energy costs, the £90 million (14%) on inpatient food or £124 million (10%)  on cleaning that trusts have had to manage. This is across an estate that has had £4.8 billion of capital investment (a 7% increase on the previous year) but where the level of backlog maintenance has continued to increase.

Capital and critical backlog

Last year, we looked into the NHS backlog figures presented in the ERIC data to understand the implications for the economy. It is worth revisiting the figures to understand any changes over the last year.

Comparing this year’s ERIC dataset to last year, there has been a 13.6% increase in NHS backlog maintenance, from £10.2 billion to £11.6 billion. To put this in context, the 2023/24 capital department expenditure limit (CDEL) budget for the Department of Health and Social Care (DHSC) PDF [773 KB], including for arms-length bodies, is £12.09 billion. Clearly, this level of funding will not address the estates issues in the NHS.

It is obvious that backlog is growing. What is concerning is the serious nature of the backlog:

• High-risk backlog has increased by almost 31% in the last year and is now £2.4 billion 
• Critical Infrastructure Risk (CIR) backlog has increased by 18.2% to £6.3 billion

Over the past two years, the average increase in CIR backlog is 16.7% and total backlog is 11.96%. If it continues to grow at this rate, CIR will be £18.6 billion by 2030.

The only way to address this backlog is through a period of intense capital investment. The New Hospital Programme (NHP), a programme to build over 40 new hospitals, with some built by 2030, may go some way to addressing this and in the last year the Reinforced Autoclaved Aerated Concrete (RAAC) projects have been prioritised.

Of the 20 trusts with the highest levels of CIR backlog, only 11 are part of the NHP programme. The question for those other nine trusts is how they can address their £1.3 billion of CIR and most of the trusts that submitted bids for the NHP third round failed to get selected.  

While the level of the CIR is striking, it is important not to ignore the impact that moderate and low-risk backlog has on patient experience, as well as the working environment for staff, no one wants to work or be treated in crumbling, sometimes unsafe, buildings.

Importance of ongoing maintenance

The 2023 ERIC data highlights the need for ongoing maintenance and investment in the NHS estate to ensure patient safety. Inadequate maintenance of healthcare facilities and infrastructure poses a risk to patient safety and increases the chances of a clinical incident.

The latest data indicates that clinical incidents, as a result of estates and facilities failure, have decreased for the second year in a row. although there were still 4,667 incidents identified. It should be noted, however, that there were significant variances in reporting by trusts, with 100 trusts identifying no clinical incidents and one trust identifying 635.

Although it is difficult to draw insights from the data, we understand that the fall in the number of clinical incidents reflects the hard work estates teams are doing to ensure patient care is uninterrupted (or minimally impacted) by the maintenance of the estates. However, this raises the question of how long can this lack of investment in CIR backlog continue?

Increasing energy costs

While the total revenue occupancy costs have increased by 11.7% to £12.4 billion, what is startling is the impact that energy costs have had on this. Total energy costs increased by 53% to £1.2 billion. This is despite the energy consumption reducing by 1.7%, as reported by NHS England. 

The NHS has a stated aim to be the world’s first net zero national health service and has set the target to reach net zero by 2040, with an ambition to achieve an 80% reduction by 2028 to 2032, for emissions it can directly control. Many trusts have identified their own more ambitious plans to reach net zero.

The data indicates that there is still significant scope for improvement as only 0.5% of total energy consumption is through direct renewable sources. Although it’s an increase from the previous year, it can be improved further. Similarly, while the level of LED lighting coverage has increased, it is still only at 46.8%.  There are significant benefits that could be delivered through investment in expanding this coverage, however, it requires capital funding. 

Healthcare facilities as enablers