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The government’s plan to build or renovate 40 hospitals over the next eight years is set to boost workloads after confirmation that the programme will go ahead in November’s budget.

In the Autumn Statement the government allocated £12 billion to the Department of Health and Social Care capital budget for 2022-23 and Glenigan’s construction market research can reveal that many of these proposed hospital projects already have planning permission.

In the 12 months to September 2022, 151 hospital projects across the UK secured planning consent. The total value of these schemes is nearly £2.5 billion, which is a rise of 37% on the total value of hospital work approved in the previous year.

Value of Approved Hospital Projects

REGION 2022 (£m) 2021 (£m) % Change
Northern Ireland 53 14 271
South West 708 280 152
East of England 295 120 146
London 647 392 65
East Midlands 178 130 37
North East 47 36 31
South East 184 159 16
Yorkshire & Humberside 68 98 -30
North West 173 274 -37
West Midlands 56 112 -50
Scotland 36 102 -64
Wales 33 95 -65
TOTAL 2,478 1,813 37

Source: Glenigan

South West leads

The region with the largest amount of approved work is the South West, where 20 hospital schemes valued at more than £700 million have won planning permission in the last year.

The largest is the £466 million Jersey General Hospital scheme, which has been given formal consent by the island’s minister of the environment (Project ID: 16216255). A joint venture between local firm Rok and Spanish giant FCC is expected to start work in the New Year,

Also in the pipeline in this region is a £126 million redevelopment of Derriford Hospital in Plymouth in Devon to provide a new emergency department (Project ID: 21469693). MWD Healthcare – a joint venture between Mace and Willmott Dixon – is due to start construction in the New Year.

Capital plans

The next biggest region in terms of work in the pipeline is London, where a £250 million new eye hospital near King’s Cross now has full business case approval (Project ID: 18203935). Bouygues is the preferred contractor for the scheme, which is known as Project Oriel and is a joint development between Moorfields Eye Hospital NHS Foundation Trust, the UCL Institute of Ophthalmology and Moorfields Eye Charity.

Seven buildings at the site of the existing Moorfields’ Eye Hospital will be demolished to clear space for the 39,500 sq m hospital. Glenigan’s construction industry analysis suggests that demolition will start in February and full construction in May.

Next year will also see the start of design work on a £328 million redevelopment of Charing Cross Hospital (Project ID: 20397032).

More approvals

Another major hospital project to recently secure planning permission is a proposed £42 million children’s heart surgery unit at the city’s Royal Victoria Infirmary in Newcastle-upon-Tyne (Project ID: 22270513).

Newcastle Hospitals NHS Foundation Trust must get final business case sign-off but providing that is secured, contractor Robertson should start construction work in April 2023.

The finished scheme must reach BREEAM Outstanding rating, which reflects a government shift towards greener construction on public works such as hospitals.

Glenigan’s economics director Allan Wilén comments: “The proposed 15% reduction of energy consumption from buildings and industry by 2030 will provide incentive for builders to design to the highest environmental standards.

“This will have an impact on project timelines for the construction industry as firms scramble to stay compliant. But it sets the scene for a renewed focus on greener, cleaner building materials and a potential opportunity for green construction and the retrofit community."

With a major pipeline of work now secured, the challenge for contractors and materials companies will be meeting these new challenging standards.

Glenigan customers can see details of all new hospital construction projects if part of your subscription.
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