NHS capital reforms let DHSC approve £300m projects without Treasury sign-off

The news

The government announced on 8 July that reforms will allow the Department of Health and Social Care to approve capital projects worth up to £300m without Treasury sign-off. This forms part of a 10-year capital plan for health and social care in England designed to cut burdensome bureaucracy and modernise the NHS estate. The plans include £1.6bn to remove reinforced autoclaved aerated concrete from 22 hospitals over the next four years and £200m to upgrade or build new neighbourhood health centres by 2030. The government aims to remove RAAC from all health buildings in England by 2035. NHS England’s capital guidance already earmarks £426m over the Spending Review period for primary care modernisation and neighbourhood health centres.

What's at stake

The change affects how the NHS estate is upgraded across England. It forms part of wider ambitions to shift care from hospitals into community settings, with the 10-year plan intended to give certainty and consistency to the construction industry. The scale is significant: £1.6bn has been allocated specifically for RAAC removal from 22 hospitals in four years, while £200m is set aside for neighbourhood health centres by 2030. NHS England’s capital guidance already earmarks £426m over the Spending Review period for primary care modernisation. Both sides agree the NHS estate needs modernisation, but they differ on whether removing Treasury oversight will deliver faster results or create new risks of poor value for money.

The case for

Removing Treasury sign-off speeds up vital NHS building projects and cuts bureaucracy. The DHSC 10-year plan consolidates previous strategies into one place to provide industry with certainty. This should accelerate the removal of RAAC from 22 hospitals with the allocated £1.6bn over four years and support the delivery of new or upgraded neighbourhood health centres with £200m by 2030. Faster approvals will help modernise the NHS estate and support the shift of care from hospitals to community settings. The approach mirrors efforts elsewhere to reduce layers of central approval in order to deliver infrastructure more quickly.

The case against

Bypassing Treasury scrutiny risks wasteful spending on poorly assessed projects. Without the additional layer of oversight, there is less assurance that schemes up to £300m represent value for taxpayers. Large capital commitments such as the £1.6bn RAAC programme and £200m for neighbourhood centres could proceed with less rigorous cross-government challenge on costs and prioritisation. This could lead to projects that fail to deliver intended outcomes or require later corrective spending. Maintaining Treasury sign-off has historically acted as a check against over-optimistic business cases in public infrastructure.

Why it matters now

If the reforms proceed, DHSC will have greater autonomy to approve projects up to £300m, potentially shortening delivery timelines for hospital upgrades and community facilities. A NO outcome would see the existing dual-approval process retained, keeping Treasury involvement for all schemes above lower thresholds. The 10-year plan provides a fixed window to 2035 for full RAAC removal and to 2030 for neighbourhood centre investment. Progress on these milestones will test whether the lighter approval regime improves delivery or exposes weaknesses in project assessment.

Further reading

constructionnews.co.uk

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