The government has committed to building 250 neighbourhood health centres, which will be financed by public-private partnerships.
Carly Caton, partner in commercial health at UK and Ireland law firm Browne Jacobson, said: “Leveraging private finance to build 250 neighbourhood health centres – earmarked as a central plank in the government’s 10 Year Health Plan to shift healthcare from hospitals to communities – is a wise move at a time of fiscal restraint.
“Public-private partnerships (PPPs) can help to speed up the delivery of new social infrastructure projects while bringing down costs to the taxpayer and sharing risk between commercial parties and contracting authorities.
“PPP programmes work well when there is a consistent pipeline of projects that allows the private sector partners to deliver economies of scale with some certainty. Bringing forward a significant number of community health centres will help to attract those private sector partners to the table.
“However, there are important lessons to be learned from previous PPP programmes, including PFI and PF2. These had perceived drawbacks such as high transactional fees, long procurements, lack of flexibility and poor-value risk transfer, which will be important to address for the NHS to benefit.”
‘New PFI’ remit still too narrow
In the Budget document (4.2 Investing in the future), the government says it will consider how private finance can support the delivery of wider infrastructure ambitions, including new towns, by building an evidence base on PPP programmes used in neighbourhood health centres.
Craig Elder, partner in public procurement at UK and Ireland law firm Browne Jacobson, said: “With tweaks across the tax system expected to drag on already sluggish growth, this was a Budget to mitigate these decisions with a bold infrastructure strategy on which the road to recovery will be built.
“But while it was reassuring to hear the Chancellor to commit to delivering previously announced transport schemes such as the Lower Thames Crossing, Midlands Rail Hub, Northern Powerhouse Rail, this felt like a missed opportunity to press ahead with its wider infrastructure mission.
“Public-private partnerships (PPPs) are correctly identified as a mechanism for building some of the 250 neighbourhood health centres and renewable energy schemes, while it leaves the door open for crowding in private finance to deliver new towns.
“This still feels like too narrow a remit when our existing schools, hospitals and prisons estate is in need of a major refresh.
“In a challenging fiscal environment and escalating cost of day-to-day public services, PPPs can play a crucial role in bringing down upfront costs for the taxpayer and sharing risk. If lessons on issues like transparency, flexibility and risk transfer can be learned on the perceived drawbacks of previous programmes such as PFI and PF2, partnerships between the state and investors remain a valuable tool in the Treasury’s armoury.”
Browne Jacobson is collaborating with the CBI to help shape the future of public-private partnerships in financing infrastructure renewal.
NHS needs to attract inward investment
The Chancellor promised a saving of £4.9bn from a variety of efficiencies will be spent on more nurses and GP appointments, along with £300m of investment in tech to improve patient services.
Gerard Hanratty, head of health and life sciences at UK and Ireland law firm Browne Jacobson, said: “In every Budget, the Chancellor faces tough decisions between plugging funding shortfalls and implementing ‘efficiency’ cuts, but we must find a way of helping the NHS with its own self-care.
“Between these binary choices is an opportunity missed to leverage the global reputation, infrastructure and expertise of the NHS to attract inward investment that can help secure its long-term sustainability and integrate innovation – while remaining true to its founding principles.
“Research and development partnerships with global MedTech and digital health businesses are a central plank in the government’s ambition to shift from curative to preventative healthcare. However, overseas companies currently face too many legal, regulatory and procurement hurdles in accessing the NHS.
“Priorities for government therefore include developing a unified NHS ‘front door’ for international suppliers, leveraging post-Brexit regulatory freedoms to streamline approval pathways and standardising procurement processes between NHS organisations to scale up healthcare interventions beyond pilot programmes.”
Browne Jacobson has published a white paper, Advancing inward investment into the UK health sector, exploring how to make UK healthcare more attractive to overseas investors.
