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Navigating Complexity and Creating Value: Insights from the NLA Healthcare Expert Panel

Wednesday 23 July 2025

Geoff Southern

Geoff Southern

Associate Director
Arcadis

The UK’s healthcare estate is navigating a profound shift, moving away from traditional models towards more integrated, agile, and value-driven approaches. Faced with the dual pressures of long-term strategic transformation and immediate operational constraints, the industry is being forced to innovate. The future of healthcare infrastructure will be defined by three interconnected themes: 

-       a new policy and funding paradigm, 

-       a smarter approach to project complexity and governance, and 

-       a move beyond isolated buildings to the creation of holistic, health-creating cities.

A New Paradigm: Pragmatic Funding and Partnership

While government strategy points to significant long-term infrastructure investment, the on-the-ground reality is one of severe capital constraints. The immediate focus of funding is on tackling the critical maintenance backlog and ensuring patient safety, creating a "make do and mend" environment. This is enforced by a hard annual spending cap—the Capital Departmental Expenditure Limit (CDEL)—which curtails ambitions for major new builds and forces a prioritisation of the most urgent risks.

Within this capital-starved landscape, private finance is re-emerging not as an ideological choice, but as a pragmatic necessity. However, learning from the difficult legacy of the Private Finance Initiative (PFI), there is a clear shift towards more collaborative alternatives like the Welsh Mutual Investment Model (MIM). Unlike PFI, MIM is a partnership model where the public sector takes a direct equity stake in projects. This gives the NHS greater control and a sense of shared ownership, making it a politically palatable and de-risked mechanism to deliver the vital community-focused infrastructure that core capital allocations alone cannot fund.

Deconstructing Complexity and Objective Governance

A critical insight for the sector is the paradox that smaller, seemingly simpler projects are often more likely to fail than large, complex hospital programmes. Major projects attract dedicated, expert teams and senior leadership, whereas smaller schemes are frequently managed by overstretched NHS staff, almost as an addition to their day jobs. Compounding this is a culture of bureaucratic overkill, where the heavyweight assurance processes designed for a £500 million hospital could be viewed as being misapplied to a £5 million community fit-out, stifling progress. To counter this, a more objective and expert-led approach to governance is essential. A compelling international precedent is the Infrastructure Ontario model in Canada, a central agency that provides institutional memory, standardised processes, and deep commercial expertise for all public projects. Such a body provides consistent, expert stewardship for the vast number of small and medium-sized projects that are most at risk of failure but are critical to the health service's functioning.

From Buildings to Ecosystems: The Health-Creating City

The most transformative shift is the move from delivering buildings to curating health-creating urban ecosystems. This involves a maturation from ambiguous "social value" metrics to rigorous, data-driven Social Impact Assessment. Leading developers are already using longitudinal, evidence-based frameworks to track outcomes over a development’s lifecycle, using hyper-local data to respond to specific community health needs.

This requires creating "enabling environments" that instinctively promote healthy behaviours, supported by integrated strategic frameworks. Initiatives like Marmot Cities provide the ethical purpose to reduce health inequalities, while programmes such as One Public Estate offer the collaborative structure for public bodies to rationalise their assets for community benefit. Agility is also key, with pop-up clinics and the "meanwhile use" of vacant sites offering responsive solutions. The future lies in formally integrating these components—purpose, evidence, governance, and agility—into a coherent operating system for urban health, potentially stewarded by a city-wide body to create a formal "matching service" between landowners and clinical providers.

Finally, this vision must recognise public housing as a foundational pillar of public health. The ability of the NHS to recruit and retain essential staff is fundamentally dependent on the availability of affordable, high-quality key worker housing. This elevates housing from an adjacent issue to a piece of critical human infrastructure upon which the entire healthcare estate relies.


Geoff Southern

Geoff Southern

Associate Director
Arcadis


Education & Health

#NLAEducation #NLAHealth


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