Navigating the NHS Estate Crisis: Strategies for Sustainable Facilities Management

Navigating the NHS Estate Crisis: Strategies for Sustainable Facilities Management

As UK healthcare faces an unprecedented mix of pressures from a growing maintenance backlog to heightened expectations in patient care, the importance of Hard Facilities Management (Hard FM) has become undeniable. In this insightful white paper, David Parrett, Director at Cadaema Consulting Services, examines how Hard FM can address critical issues – from ageing infrastructure and resource allocation to ESG commitments and patient outcomes. David highlights strategic steps healthcare leaders can take to ensure a resilient and future-ready healthcare estate that enhances service quality and upholds the NHS’s mission.

We are living through the greatest challenge that the UK’s public healthcare systems have ever faced. The Coronavirus pandemic caused an unprecedented shock to the way in which our established healthcare processes operate increasing both demand and profile in equal measure. Alongside this generational event the UK’s population is bigger than it has ever been and is living longer and suffering from an increasing volume of long-term conditions. In 2020, one in three patients admitted to hospital had five or more health conditions, up from one in 10, ten years previously.

All of this creates a huge demand on healthcare – and particularly acute healthcare – infrastructure and buildings, and a different profile in terms of how Trusts should direct precious capital and revenue resources to ensure they protect the integrity of their front-line services, and that supporting services generate real value towards healthcare outcomes and patient experience.

This paper sets out the scale of this issue in connection to Hard FM services through the lenses of capital allocation, revenue spend and investment in environmental and social governance and the potential knock-on impacts and factors that healthcare leaders need to consider to ensure that their buildings are fit for purpose for the immediate, medium and long-term futures of their core service delivery.

Backlog
It’s not just the UK population that is ageing, healthcare infrastructure is, too. In its 2019 / 2020 publication, the Estates Return Information Collection (ERIC) process run by NHS Digital to collect data about property costs reported that 28.19% of the healthcare estate in England and Wales was more than 50 years old. In 2022/2023 this had grown to 29.80%.

Over the same period, the ERIC reported maintenance backlog value (the cost to return buildings to Condition B, a good standard) rose from £9bn to £11.6bn (a 29% increase in just three years) and, more worryingly, from £336 /sqm to £475 / sqm – a 41% increase. The condition of the retained healthcare estate is deteriorating at an alarming rate.

Navigating the NHS Estate Crisis: Strategies for Sustainable Facilities Management

This creates significant additional demands on revenue funded services. Planned maintenance and statutory compliance becomes increasingly expensive but perversely more critical and, therefore, causes backlog cost to rise exponentially. Asset replacement becomes more challenging and the whole cycle appears to have reached a position where it has become too difficult and expensive to know where to start. £11.6bn is likely to only be the tip of the iceberg in terms of actual costs.

Associated Soft FM (notably cleaning) activities also become much more costly. Of the 10 sites that the 2022 / 2023 ERIC reported with the highest £/sqm backlog costs, their cleaning costs / sqm metre were, on average, 394% higher than the average cleaning costs reported in the entire return.

High backlog maintenance costs of buildings can also present significant health and safety risks – of the £11.6bn reported as the maintenance backlog figure in 2022 / 2023, 54% of it has been attributed to “High” or “Significant” risk i.e. where the backlog itself is causing, or likely to cause, risk to the health and safety of the building’s occupants. NHS England have now commissioned a study to investigate the link between backlog maintenance values and interruptions to patient care and/or patient harm incidents. It is believed that across England and Wales somewhere in the region of 7,000 healthcare activities were interrupted because of infrastructure issues in 2023. This creates a tangible but, as yet uncalculated, opportunity cost for Trust leaders in terms of missed or reduce revenue from the delivery of procedures.

The reality is, of course, that it is not possible to completely eradicate backlog maintenance from the estate. However, the fact that it is already such a high number, and growing both in actual terms and on a sqm basis, presents a real challenge for healthcare leaders.

Understandably, focus will always be on directing funds directly to front line services and staff to deliver them. However, there is an urgent and real need for NHS leaders to take a longer term, strategic view and really consider how the age and condition of their buildings supports recruitment and retention, lower revenue costs, higher standards of health and safety and, critically, patient care and perception.

Focus and comprehension of the issue is slowly growing. In its 2024 publication, “Building The Future – Brick By Brick”, the British Medical Association noted that an “alarming” 38% of doctors surveyed reported that the condition of their workplace was “very poor” and 43% reported that infrastructure issues have, at some point, had a negative impact on patient care.

NHS leaders should have clear plans for how they are going to address these challenges and be absolutely clear about how they obtain the skills needed to do so in a strategic, sustainable way.

Maintenance & Repair
Understandably, given the clear links between clinical expertise (infection control and dietetics) there has been considerable focus on Soft FM activities and appropriate risk sharing between healthcare client teams and service providers where these activities are their core business. In these areas, there is a very mature knowledge economy and auditing regime and an established – and largely accepted – relationship between healthcare organisations and private sector service providers.

As a general rule, the same cannot be said for maintenance and repair activities – with many of the sectors ‘Estates’ functions remaining in-house or delivered through a hybrid of in-house teams and a disaggregated network of local, component element focused suppliers.

Navigating the NHS Estate Crisis: Strategies for Sustainable Facilities Management

It is likely that this is driven by three main factors:

  • There is a significant range of activities within this function in terms of qualifications required leading to the perception that it is difficult to aggregate them in terms of activity schedules
  • There is, generally, a requirement for this function to hold fewer people than Soft FM teams and, therefore, the back office support functions to manage the cohort being less demanding
  • The link between the specifics of these services and healthcare outcomes is more distant and seemingly unconnected to clinical pathways

For each of these factors, there is a compelling counter argument.

Aggregation of activity at a task level can be difficult given the specialisms and qualifications that are involved for some tasks. However, blending these activities (and specific elements within these) with other, less skilled tasks is where financial efficiencies and reductions to healthcare delivery interruption can be delivered. Similarly, ensuring that planned activities are coordinated with reactive repairs and, to some extent, small improvement projects is where real value can be generated. This can only be done where there is an effective, comprehensive controlling entity to do this.

It is true that the market point for engineers and technicians is above the National Living Wage and, therefore, recruitment can be (although this is by no means guaranteed) easier for healthcare establishments. However, for recruitment and retention processes to be effective for healthcare providers, they need to be able to offer genuine training, development and investment opportunities. Realistically, it is difficult for healthcare providers to do this as these activities are not core business.

The obvious link between Hard FM activities and clinical pathways is difficult to discern…especially for healthcare provider organisations where their focus is, quite rightly, on the latter and not the former and the feedback loops are much more immediate. However, maintenance and repair activities drive compliance to legislation (this is true of all sectors but must be in sharper focus within environments connected to delivering healthcare activities) and quality of healthcare outcomes provided.

Due to the technical nature of many of these tasks, they require individuals with specific accreditations and qualifications and a supporting infrastructure that can provide quality assurance as well as training, oversight and technology in support of these people. Failure to do this effectively, can lead to, at the very least, inefficient building running costs and, at the very worst, serious risk to the health and safety of all building occupants.

The link between a coordinated, well managed and run Hard FM function, more efficient buildings and services, lower maintenance backlog and improved health and wellbeing of staff, patients and visitors appears to be clear.

That is not to say that the answer here is to outsource everything to the private sector. In-house delivery models can, and do, work very effectively. However, healthcare leaders should assure themselves that:

  • They are aware of the full extent of risk they are carrying around statutory compliance and what this means for the sustainability of their buildings to provide healthcare services
  • They collect, analyse and share accurate and timely data about the performance of their estate and assets and that this is used to pre-empt investment decisions and the implementation of focused maintenance programmes
  • They are willing to acknowledge that other sectors will contain learnings and best practices that can be adopted in healthcare environments e.g. data centres and critical maintenance
  • They can attract and retain talent to deliver these services
  • They are generating maximum value for money from these activities to protect front line healthcare services

Environmental & Social Governance (ESG)
The Social Value Act 2012 impressed on public bodies the importance of considering how their organisation could improve their impact on economic, social and environmental wellbeing. Although the legal requirements of the Act are actually quite limited, many sectors choose to go much further and actively apply social value principles into some of their work practices.

This principle has been adopted by the NHS with many Trusts, quite rightly, giving ESG high profile agenda time as part of board governance processes and, since April 2022, NHS England has required a minimum of 10% of all procurement evaluation criteria to focus on social value.
Navigating the NHS Estate Crisis: Strategies for Sustainable Facilities Management

The challenge for individual organisations is the immediate investment in strategic thinking around ESG and the limited impact they can have in isolation.

Because of the focus ESG has gained in terms of procurement exercises (it can mean the difference between winning and losing tenders), private sector organisations can see more immediate returns on investment in strategic thinking around ESG and are able to share thinking and best practice between their contracts.

Importantly, because their return on investment here can be relatively quick and easy to identify, they are also able to justify investment in new technologies, systems and processes that create ‘on the ground’ benefits that their clients are unlikely to have had the bandwidth to think about nor afford to implement.

Further, there is a strong link between facilities management activities and a broad range of ESG initiatives. Hard FM activity manages buildings and their performance in terms of utilities and carbon. It employs relatively low paid colleagues and has a well-formed career pathway for apprenticeship programmes. Hard FM skill sets can often be put to good use in terms of well-being activities and projects to support healthcare leaders cement their place in their local communities.

Conclusion
The macro-economic landscape within the UK and beyond has changed significantly within the last 10 years creating a step-change in the demand for healthcare services and how they are accessed. This, in turn, has created a catalyst for change in how healthcare leaders consider their property and the role it plays in the delivery of healthcare outcomes.

This change has not yet matured but will surely do so over the next three to five years, with the increased levels of choice offered to patients meaning healthcare leaders need to attract customers from their peer group to maintain their financial and operational viability.

There is an opportunity to deliver this change through Hard FM activities and specifically:

  • Enhancing the condition and appearance of the estate from which services are provided. Leaders should monitor their need to retain portfolios of the size they currently are – how much can be done remotely, what does an ageing population require in terms of outreach healthcare provided at home rather than in a hospital hub. Could portfolios be reduced to ‘pump-prime’ investment and improvement in what is retained and how does the commercial property market respond to this?
  • Coordinating planned and reactive maintenance activities through a professionalisation of the function. Achieving statutory compliance should be a non-negotiable and organisations should be called out where this is not the case. Recognising that there is an opportunity – ne obligation – to aggregate this activity to secure the right resource, reduce costs and, critically, obviate disruption of front-line healthcare delivery and patient wellbeing.
  • Embedding ESG outputs into Hard FM activities and services to drive real economic, social and environmental benefits and using appropriate commercial levers to unlock revenue savings, investment in infrastructure and people.

Enhancing the profile of Hard FM will bring supplemental benefits but, more importantly, it will ensure that the UK has a healthcare property portfolio that is fit for purpose and showcases the underlying brilliance of the NHS.

More Information:

Contact Cadaema Consulting Services to find out how they can help you drive value and improve patient care – [email protected] or visit www.cadaema.com

Public Sector Focus