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12th June 2023
The prospect of a significant boost to hospital building work emerged last month when the Government relaunched its £20 billion hospital infrastructure investment programme.
Media attention focused on the news that eight of the 40 new hospitals in England pledged for 2030 in the last Conservative manifesto would not be completed after the end of the decade.
But as part of its so-called New Hospital Programme (or Hospital 2.0), the Government did commit to rebuilding five hospitals by 2030. The five are Airedale in West Yorkshire, Queen Elizabeth King’s Lynn in Norfolk, Hinchingbrooke in Cambridgeshire, Mid Cheshire Leighton in Cheshire, and Frimley Park in Surrey.
Meanwhile, two of the worst-affected hospitals due to be redeveloped – West Suffolk Hospital and James Paget Hospital in Norfolk – already form part of the New Hospital Programme (see below).
Yet even before the latest government announcement, a more encouraging prognosis had begun to emerge on the outlook for health-related construction. Glenigan data shows that while new health contract awards are showing tentative signs of recovery, a surge in detailed planning approvals, particularly for major projects, should provide a tonic to lift activity in the sector in the months ahead.
Detailed planning approvals for health projects were worth £2,310 million during February-April, virtually double the previous three months and 77% up on the period last year. Meanwhile, project approvals for major health schemes leapt to £1,271 million, an almost four-fold increase on both the previous quarter and on the same period a year earlier.
Broadly based upturn
The upturn in health-related planning approvals appears to be broadly based and not limited to major schemes. Glenigan data shows that underlying approvals (for schemes worth under £100 million) were worth £1,039 million in the three months to April, up 36% on the previous quarter and 7% higher than a year ago.
The revival in approvals is also widely spread across the country. Hospital building, and other health-related project approvals, doubled in the three months to April compared to a year ago in both the South East (to £654 million) and in the North East (to £158 million). Meanwhile, project approvals in London rose five-fold to £290 million, boosted by phase four of the Great Ormond Street Hospital (pictured) scheme (Project ID: 16262388).
New NHS hospital schemes
Major new NHS hospital schemes to gain planning approval which have bolstered the construction pipeline include the £648 million West Suffolk Hospital in Bury St Edmunds highlighted by the government last month.
Work on the redevelopment to replace existing buildings, which is at the pre-tender stage, and which will involve around 100,000 sq m of new space, is due to start in early 2025 and run for 27 months (Project ID: 20395205).
Meanwhile, construction work on the £100.1 million re-development of the James Paget Hospital in Great Yarmouth is set to get underway next spring. The project is at the pre-planning and pre-tender stage and work is set to run over some five years (Project ID: 20397019).
Elsewhere, detailed plans have been granted and work is due to start later this autumn on the £126 million new emergency department at Derriford Hospital in Plymouth which has been let under a framework and is set to run for 23 months (Project ID: 21469693).
The Government’s recent push to invest more in new mental health facilities is also highlighted in Glenigan data. In Bournemouth, detailed plans have been granted for a £33.5 million Child and Adolescent Mental Health Services unit at Herbert Hospital involving over 1,400 sq m of space. Work is due to start early next year and run for 23 months (Project ID: 22400837).
Further along the south coast at Bexhill-on-Sea, Kier Construction is due to start work this summer as main contractor on a £42 million new mental health facility for Sussex Partnership NHS Trust. The project will run over 19 months and involves over 5,000 sq m of space (Project ID: 21563606).
Some significant health-related private schemes are also set to boost the construction workload in the sector. Detailed plans have been granted on Symmetry Park, a new £85 million R&D, and production facility for Siemens Healthineers UK at Bicester in Oxfordshire. Work is due to start this summer and run for 24 months (Project ID: 21445884).
Smaller private sector schemes are also strengthening the pipeline of health-related work. In Edinburgh, detailed plans have been granted and work is due to start this autumn on a £6.9 million refurbishment of a specialist healthcare facility for Welbeck Health Partners at Castle Terrace (Project ID: 23067892).
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