The UK Government’s reset of the £56bn New Hospital Programme has brought greater stability to one of the country’s largest construction pipelines, but significant delivery challenges remain, particularly around the replacement of hospitals affected by reinforced autoclaved aerated concrete.
A recent update indicates the programme is now on a more credible footing, with the final hospitals expected to complete in 2045–46. However, seven hospitals prioritised due to extensive RAAC use are not forecast to open until 2032–33, well beyond the original 2030 replacement deadline.
For contractors and consultants, the reset offers longer-term certainty and a clearer forward pipeline. However, the next five years will be critical, with a tightly sequenced construction programme and limited contingency leaving little tolerance for early delays or cost overruns.
Key milestones are approaching. The Hospital 2.0 alliance contract, originally expected to be awarded by the end of last year, is now anticipated in early 2026. Work to finalise the standardised Hospital 2.0 designs is due to be completed by April 2026.
Market interest in the alliance has been strong, with more than 20 contractors expressing interest and 16 firms shortlisted to take part in competitive dialogue.
Wave 1 schemes are currently scheduled to begin construction in 2028–29, including major developments at Milton Keynes Hospital and Leighton Hospital. These projects will be among the first to adopt the Hospital 2.0 standardised design approach.
Despite improved programme structure, capacity constraints within public sector client teams remain a concern. Vacancy rates stood at nearly 40% in late 2025, with shortages in digital, commercial and technical expertise identified as a key delivery risk.
The reset followed a review which concluded that the original programme was not deliverable as planned. It now comprises 41 hospital schemes delivered across four waves over the next 20 years, alongside five schemes that were completed prior to the reset in early 2025.
Total funding for all 46 schemes now stands at £60bn, including £56bn of capital expenditure. This represents a significant increase on earlier assumptions and includes a £12bn contingency to reflect inflation, market pressures, engineering complexity and environmental requirements. Capital investment of £8.9bn has been allocated between 2025–26 and 2029–30, with annual spending rising to around £3bn from 2030–31 onwards.
RAAC remains the most immediate risk to the programme. An independent review recommended replacing seven RAAC hospitals by 2030, but that deadline will be missed. By 2025, more than £500m had already been spent on mitigation measures, while NHS trusts continue to incur between £100m and £140m a year in additional maintenance costs as replacement projects are delayed.
The reset places strong emphasis on the Hospital 2.0 model, which aims to standardise layouts, improve buildability and create a more predictable market for contractors. Features include single-patient rooms, reduced staff travel distances, digital patient records and enhanced monitoring technology. Across 28 Hospital 2.0 schemes, average overnight bed numbers are expected to increase by around 6%.
While the programme now rests on firmer foundations, maintaining delivery discipline will be essential if long-term ambitions are to be realised and further delays avoided.
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