Speaking at a Westminster Business Forum conference, former Health Minister Lord Hutton suggested that existing NHS Private Finance Initiative (PFI) contracts should be used to rapidly modernise hospitals rather than waiting decades for new builds.
The proposed NHS Rapid Upgrade Programme would unlock up to £16 billion of private investment in ageing hospitals and is backed by the largest social infrastructure investor in the UK, the Association of Infrastructure Investors in Public Private Partnerships (AIIP). It would allow carefully structured, value-for-money extensions to existing NHS PFI contracts, enabling investors to refinance projects and inject billions of pounds into upgrading hospital buildings, expanding capacity, improving energy efficiency and supporting the government's Net Zero ambitions.
New AIIP analysis suggests that extending contracts across 151 NHS PFI projects due to expire during this Parliament could unlock around £15.4-£16 billion of investment –almost enough to address the current £15.9 billion maintenance backlog, (although this is expected to rise again in the 2026 ERIC data). The AIIP modelling indicates individual NHS Trusts or projects could receive around £180 million of upfront investment for modernisation and expansion.
Addressing delegates, Lord Hutton said Britain had become trapped debating the past rather than delivering the infrastructure patients need today.
He said: "Britain has a delivery problem. We know we need new hospitals. We know we need modern primary care. The real question is much simpler: how do we actually build it?"
Lord Hutton contrasted the pace of historic NHS investment with today's delivery:
"Around 90 hospitals were delivered through the original programme in less than a decade. Today, some replacement hospital projects have spent well over a decade simply working their way towards construction."
He added: "The debate should not focus solely on handback. We should instead ask a more ambitious question. How can these assets become the foundation of an NHS Rapid Upgrade Programme?"
The proposal comes as NHS leaders continue to grapple with deteriorating buildings, growing maintenance costs and increasing demand for healthcare services.
It is particularly pertinent at the moment as the volume of PFI projects expiring in the next decade exposes departments to immense pressure and the risk of service disruption as well as costly legal disputes due to lack of preparedness.
Rather than waiting years for entirely new hospitals, AIIP argues existing NHS facilities could be upgraded far more quickly through extensions to current PPP contracts, with private finance funding new wards, diagnostics, operating theatres, energy efficiency improvements and additional clinical capacity.
Lord Hutton told the conference: "Sometimes the fastest way to create new capacity is not to start again. It is to build intelligently on what already exists."
Commenting on the performance of the original PFI programme, Simon Reason, noted: "99% of PFI was delivered on time and on budget."
AIIP wrote to James Murray MP, the Secretary of State for Health and Social Care in June urging ministers to work with investors on developing the NHS Rapid Upgrade Programme alongside reforms to improve relationships between NHS Trusts and existing infrastructure investors. The association argues that resetting those relationships will be essential to attracting long-term institutional investment into Britain's public infrastructure.
Private money for public infrastructure
The Chancellor, Rachel Reeves has previously confirmed that Public-Private Partnerships will be utilised to fund NHS infrastructure, referencing neighbourhood health centres, in models that learn from the mistakes of the past.
A new report from Public Policy Projects (PPP) evaluates new approaches to capital investment that it says are essential if the NHS is to deliver neighbourhood health centres. The report, ‘The future of capital funding and neighbourhood health estates’, brings together insights from senior NHS leaders, policymakers and industry experts who participated in a PPP roundtable earlier this year. It finds that future partnership models must balance risk more fairly between the public and private sectors, improve transparency and deliver better long-term value than legacy PFI arrangements. It also calls for organisations to explore alternative funding mechanisms, strengthen commercial capability and embed sustainability into estate planning from the outset.
Ozan Goceroglu, Relationship Specialist at NHS Property Services Ltd and Chair of the roundtable, comments: “Delivering neighbourhood health successfully will depend not just on policy ambition, but on practical collaboration, long-term thinking and making better use of the assets and partnerships already available to us. By taking a more coordinated, practical and forward-looking approach, the NHS can shape an estate that supports a clinical model which meets the needs of the communities it serves.”
