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As the end of the financial year approaches, NHS Trusts face the annual challenge of how best to use their available capital funding before it’s lost.
Public funding for health services in England comes from the Department of Health and Social Care’s (DHSC) budget, where the majority of spending goes towards day-to-day costs that upkeep the routine running of NHS organisations, such as staff salaries and medicines – classified as operational expenditure (OpEx). The remainder of the budget is allocated to capital expenditure (CapEx), which covers longer term investments, such as modernising hospital buildings, maintaining safety standards, and expanding capacity.
However, limits on annual CapEx mean that any unspent funding must be returned to HM Treasury at the end of the financial year, leaving NHS Trusts at risk of underspending and losing valuable resources. As the end of the financial year fast approaches, NHS Trusts need to be reviewing any additional funding they have available and finding ways to deliver new capacity and infrastructure at a fast pace, without compromising quality or long-term value.
This is where modular solutions can make a real difference, providing compliant, fast, flexible healthcare infrastructure that aligns with NHS funding cycles.
In comparison to traditional construction, Modern Methods of Construction (MMC), specifically modular solutions, can provide the speed and flexibility needed for healthcare organisations to deliver high quality spaces, while working within funding cycles and to tight timelines.
For NHS Trusts facing end-of-year capital deadlines, speed is not just a convenience, it’s essential to avoid losing valuable resources. Built offsite and installed quickly and precisely, modular buildings are manufactured in a factory-controlled environment, then transported and assembled onsite. Because the groundworks and module production can happen simultaneously, the overall process is significantly shortened making it well suited to end-of-financial-year CapEx delivery.
Modular construction offers speed without cutting corners on quality or safety, as buildings can be developed to high clinical standards, fully HTM and HBN-compliant.
At Premier Modular, we support the NHS by delivering high quality, healthcare facilities in line with individual Trust-specific timelines and requirements. Our modular solutions can be designed, manufactured and delivered at pace, enabling NHS teams to act promptly to utilise funds they have available at the end of the financial year and commence projects without waiting for the next budget cycle.
With three months of the financial year to go, Premier Modular was commissioned by Dorset County Hospital NHS Foundation Trust to deliver a high-performance, fast-tracked solution that could handle ongoing capacity issues.
With the Trust contractually required to spend their government funding by the end of the financial year, we accelerated the project by developing a meticulous design management plan informed by daily meetings with multiple stakeholders. In just seven weeks, a strategy that met the Trust’s needs was finalised, and the £2.8 million project was designed and costed before the deadline. The 650m² permanent building is an advanced facility comprising 18 individual modules, three four-bed bays, plus four single-bed side rooms complete with assisted en-suites and associated facilities. The building also features a discharge lounge to reduce backlogs in bed capacity, ambulance queues and patient waiting lists.
By enabling rapid design, quick delivery and early cost certainty, we enabled the Trust to commit capital funding within a short timeframe, while delivering a permanent, fully compliant clinical facility that supports long-term NHS performance.
There is no doubt that whilst CapEx and OpEx budgets operate differently, they both form the fundamentals of any public sector organisation’s financial toolkit. However, if the need for a new space occurs once the CapEx budget has been spent, modular buildings can be allocated to OpEx spend instead, which traditionally operates with less stringent timelines and budgets. This provides NHS Trusts with flexibility and offers a high-quality solution without teams needing to commit large upfront capital.
The lease of modular buildings enables healthcare organisations to spend smaller amounts over a given period, safe in the knowledge that the cost of renting the building(s) will stay fixed throughout the contract. For example, we offer a wide range of funding models, from short and long-term rental, to leasing, and even pay-by-activity agreements. This gives NHS Trusts more control over how and when budgets are spent.
Traditional construction routes often clash with the realities of NHS budgeting cycles due to their long timescales and significant upfront investment. Modular construction is the ideal solution for NHS Trusts looking for a strategic way to spend end-of-year budget, as it provides fast, affordable, flexible, and fully compliant healthcare solutions that align with NHS funding cycles and constraints.
By utilising modular solutions and MMC the NHS can achieve its goals of improving performance, reducing waiting times, and building a more sustainable health service.
Read more about our flexible modular rental options or contact our team directly today.
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