The symbolic promise of a government United kingdom Building 40 hospitals by 2030 has been hit by inflation, so officials are debating which projects to delay such as the capital budget for National Health Service (NHS, for its English acronym) faces a shortfall of around £2 billion by 2027-2028.
While the Minister of Finance, Jeremy HuntAs he prepares to present the budget on March 15, people close to the process said the Health Department and the Treasury Department have had difficult discussions about how to fund the program.
They added that some of the 40 hospital projects are likely to be frozen, mainly due to the need to prioritize urgent work to repair five hospitals whose roofs are at risk of collapse.
The promise to build 40 hospitals was at the heart of Boris Johnson’s 2019 election platform, but it stirred controversy from the start.
Most of the proposed projects were not new hospitals, but rather expansions and remodeling or replacement of existing units, and an investigation was launched by the National Audit Office. In fact, an investigation by The Observer newspaper in February revealed that only 10 plans had been granted planning permission.
The Department of Health’s capital budget, from which the program is funded, is expected to rise from £11.2bn in 2022-2023 to around £12.6bn in 2024-2025, before remaining flat in cash terms for three years.
But with inflation at its highest level in a generation, officials knew this would create a new black hole of around £2 billion in the 2027-2028 budget.
Health officials are grappling with rising construction costs and several additional demands on the capital budget, such as the need to replace unsafe roofs at some existing hospitals, which have applied to be part of the final phase of the program.
he Department of Health and Social Assistance He announced that he remained “committed to all projects of the largest last-generation hospital construction program”.
A national plan is being drawn up to build new hospitals “so that projects can be built faster and good value for money is guaranteed”.
The pressure on the hospital program is part of a larger shortfall in capital spending on everything from defence, social housing, highways, rail and schools to energy projects. In November, the Chancellor of the Exchequer announced that he would keep total capital spending in cash unchanged at £600 billion over the next five years.
But with inflation at its highest level in decades, this will lead to deep cuts to departmental capital budgets for years to come. According to the Institute for Financial Studies (IFS), the reduction is equivalent to 15 billion pounds in 2027-2028 compared to what was expected.
Ben Zarankochief research economist at IFS, noted that areas of spending at risk of being affected by the cut include defence, energy and investment in climate change.
“It’s hard to prioritize all these things at once and keep global investment stable. I would be nervous if I were in charge of investing in social housing, for example. If the government decided hospitals would remain the priority, then something would have to be given.”
Zaranko He pointed to pressures imposed by rising costs and added that general inflation in the construction sector reached 10 percent in December, according to data from National Statistics OfficeBut in the case of new infrastructures, it was 14.9%.
Downing Street He grapples with the dilemma of whether to report all cuts to infrastructure projects in one big ad or in a series of negative notices from each department.
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