In recent times there has been occasional mention, in various quarters, of a desire to build a new North Tees hospital. Prior to his reelection as Tees Valley mayor in 2024, Lord Houchen campaigned on a commitment to find the money for such a project, and he was questioned on why nothing has happened in this regard at a mayoral question time meeting in March this year. Beyond the mayor’s apparent frustration at a lack of dialogue with Wes Streeting, there was no progress to report. North Tees and Hartlepool NHS Foundation Trust (NTHFT) board papers in 2024 and 2025 have some cryptic mentions of a ‘strategic outline case’ for a major estates development at the North Tees site, but virtually no detail of what might be planned. Going further back, there are reports in 2023 and 2021 of “cross-party support”, among Stockton councillors and local MPs, for a bid to rebuild much of the existing infrastructure. A bid which evidently came to nothing.
So, there is ample support for the idea of planning and constructing a new North Tees hospital, but so far next to no sign that this is going to come to fruition. This article revisits the case for providing a modern, fit-for-purpose hospital to replace the existing facility, explains why the decision to invest has been mired in doubts and delays, and tries to suggest a positive way forward. Buckle up!
Why a new North Tees hospital?
Lifespan
North Tees Hospital was built in 1968, at the tail-end of a period of significant development of hospital infrastructure in the UK, and when it was generally accepted that hospitals were expected to have a useful physical life of around 40 years. Over those decades, North Tees hospital has seen periodic expansions and adaptations, regular maintenance and many additions of more up-to-date clinical and operational technologies. However, as set out in a recent and comprehensive ‘6-facet’ engineering survey, the current infrastructure is rapidly approaching the point at which major maintenance issues become more frequent and costly, and safety concerns could become more acute. These could range from parts of the hospital becoming unusable, which would impact on capacity to treat patients, to more serious threats of direct harm to patients, staff and the public.
Operational factors
Even if the current infrastructure remains fully operational for some time to come – which is not at all certain – the fact remains that trying to offer the clinical services of the 2020s in buildings designed and built in the 1960s is a huge challenge. Upgrades to clinical and non-clinical spaces can help, as can the adoption of some new digital technologies, but there is a fundamental and growing mismatch between the kind of care and treatment that should be offered to patients and the ability of the hospital environment to support that. This has an impact on staff, who naturally want to give of their best, but are frustrated and demoralised by trying to do so in an environment that is, to a significant extent, fighting against them. This is not just an issue for front-line, clinical staff; it is also true for the staff who work in support services.
Costs
Older buildings cost a lot to maintain. Quite apart from wear and tear on the fabric on the hospital, the electrical, water, heating, ventilation and digital systems are also subject to deterioration, and as they age the likelihood of unexpected and expensive failure increases. Money spent on maintenance is money that cannot be directed to other capital projects, and over time this adversely affects the scope and quality of clinical services.
The combination of a deteriorating environment and sub-optimal investment in modern services is not an attractive option for staff, leading to difficulties in recruiting and retaining healthcare professionals, technicians, administrators and others. This also has a cost.
Policy environment
Current DHSC policy emphasizes three shifts in relation to the NHS: hospital to community, analogue to digital, sickness treatment to prevention. All three of these shifts are hampered by poor quality hospital environments. Ideally, community services should sit alongside a modern, fit-for-purpose hospital which is built and run to intervene only for the shortest time necessary, until a patient can be returned to home or another care environment. This is difficult to achieve if ward layouts result in excess hospital-acquired infections, or emergency department shortcomings result in ‘corridor care’ and long waits. Digital technologies cannot entirely leap-frog the physical space in which they operate, especially if building materials make for poor Wi-Fi signals, or robotic delivery services have to work around unsuitable floor plans. Ideally, a modern hospital should have enough inbuilt adaptability to be able to flex when needed, to offer space and resources to public health teams, community health staff and researchers who are running preventative health projects.
Policies and standards relating to the physical environment of hospitals rightly stress the importance of creating and maintaining clinical and non-clinical spaces that are safe, health-promoting, efficient, affordable and environmentally sustainable. Retrofitting an ageing estate to meet these standards is possible up to a point, but complex and expensive to achieve. There comes a point when brand new infrastructure is simply the right policy choice.
What is stopping investment in a new hospital?
If a new hospital is needed, what is holding up the decision to invest? I suggest there are three reasons: local indecision; regional reluctance; national incoherence. Let’s look at each in turn.
Local indecision
Back in 2010, there was a well-developed plan to build a new hospital to serve the populations of Stockton-on-Tees, Hartlepool and the communities of east Durham. The existing hospitals – North Tees and Hartlepool – would cease to operate, and a new, modern hospital campus would be built at a site in Wynyard. But this was only one part of the plan. The other part, equally important, was to invest significantly in the care offered closer to people’s homes, through primary and community teams, local authorities and the ‘third sector’. The complete plan had a name: Momentum: Pathways to Healthcare. Somewhat ironically, the principles of the Momentum programme were similar to the current government’s ambitions for NHS reform.
In 2010 there was a general election, and the pen that should have signed off on the final version of the new hospital business case was passed to the incoming Chancellor of the Exchequer, George Osborne. He was one of the architects of the era of austerity, and sadly the investment necessary to build the new hospital was snatched away.
The reasons for that investment, though, were very much alive and kicking, and well known to health service bosses across Teesside. As a result, applications for funding, to build something – anything – continued to be made periodically, but without sustained success. A new North Tees hospital did not make the cut for the first round of the ‘New Hospitals Programme’, touted at one point by Boris Johnson, nor was it included in the second wave of announcements. The existing buildings are mostly free of RAAC (reinforced autoclaved aerated concrete), the material that has driven urgent investment in at least eight hospitals in other parts of the country. At the moment, there is a occasional mention in trust board papers of an outline strategic case for investment, but no outward sign of further development.
To complicate matters, North Tees and Hartlepool NHS Foundation Trust recently became part of the University Hospitals Tees (UHT) group, alongside its neighbour South Tees Hospitals. The formation of hospital groups, or merged hospital organisations, has been all the rage in the English NHS in recent years, and Teesside is no exception to that rule. A hospital group is obviously larger and more complex than a standalone hospital, and has to balance competing demands. Should some services move from one site to another? What kind of technologies should be deployed across the departments? And – how should available capital funding be used?
At the moment, the UHT group is embarking on a kind of horizontal integration of its service lines. That is, the staff in the various specialties are having to learn how to work with their colleagues in different sites, use the same information systems, share patient lists, manage logistics collectively, and so on. This is no small task. It requires dedicated leadership, forums where issues and disagreements can be resolved, organisational reform and some financial reconfiguration. In the midst of these major changes, there is an ambition, as set out in the group’s clinical strategy document, to move eventually towards having what they call a ‘specialist acute hospital’ and a ‘general acute hospital’. The former means a revamped James Cook hospital, while the latter will be North Tees in some form.
To muddy the water still further, the DHSC is now asking the NHS to lead on creating neighbourhood health frameworks. These are intended to bring together hospital organisations, mental health trusts, public health, primary care, community health services and local authorities, to improve the overall health of their local population. The eventual shape of the each neighbourhood health framework will significantly affect which services are retained in-hospital, and which will be distributed to other locales or providers. This in turn may have a big impact on the scope and purpose of any proposed capital investment in a new hospital.
The UHT group board is currently very busy with bringing together the clinical services of two previously separate organisations, and playing a key role in determining the neighbourhood health frameworks for the boroughs across Teesside, while also busting a gut to improve overall performance. One might therefore suspect that the UHT board is as yet unsure about what kind of hospital they may need in future to replace North Tees. They will have some ideas, certainly, but that is a long way from the kind of detailed, comprehensive and persuasive case for investment that would make officials in the DHSC and the Treasury sit up and take notice.
Regional reluctance
First, who do we mean by the ‘region’? Confusingly, there are at least two bodies that have a say in how NHS services are run in the north east.
At present, the North East and North Cumbria Integrated Care Board (NENC ICB) has oversight of many aspects of the NHS, such as provider organisation finances and performance, integrated working with primary care and public health, and relationships with local authorities. The NENC ICB is one of the more successful ICBs in the country, in that it has been relatively stable in organisation and leadership terms, and it is responsible for trusts with (mostly) good performance and finances. This is a strong starting position, but ICBs across the country are currently undergoing major and painful restructuring, and the NENC ICB is no exception. The DHSC and NHS England have required ICBs to downsize drastically, cutting 50% of their workforce, and to abandon some of the responsibilities that they have enjoyed up to now. The future of ICBs appears uncertain, but it is likely that they will act more as strategic commissioners of services, and will have much reduced oversight of capital and revenue expenditure and service quality/safety indicators.
In these circumstances, it would be entirely understandable if the NENC ICB were to swerve difficult decisions about whether to endorse a capital bid for a new hospital. Certainly, there is no public sign that the NENC ICB has the issue of a new hospital for North Tees in its sights.
The second body with influence over Teesside’s NHS services is the NHS England regional team. This acts more as a regulator than a guiding light, and has the power to intervene in the governance of NHS trusts if they prove inadequate in respect of finances, safety or quality. In effect, it is the voice of the centre at regional level. The NHS England regional director may (or may not) speak softly, but he or she always carries a big stick.
The NHS England regional teams also face major disruption in the coming months. The current Secretary of State for Health and Social Care determined early in his tenure that he wanted to do away with NHS England as a quasi-arms-length body, and run the NHS directly from his department. NHS England staff are therefore being made redundant, or are in the process of being ‘folded’ into the DHSC, with all the anxiety and stress involved in that process. The upshot is that any influence the NHS England regional office may have on capital investment decisions, is currently diluted.
National incoherence
40 new hospitals by 2030! Who remembers that battle cry, delivered by the most bombastic PM of recent times, one Boris Johnson?
It was never anything other than boosterish rhetoric. Some of the ’40 new hospitals’ were already planned and being delivered, as part of a very anaemic, post-2010 programme of health facility development. Other ‘new hospitals’ turned out to be nothing of the sort – additional wings to existing hospitals, modest investments in buildings for specific care pathways, or simply refurbishments.
The DHSC did eventually set up something called the ‘New Hospitals Programme’ (NHP), which was charged with identifying the localities that would receive capital investment for new hospital infrastructure, working with the private sector to streamline the design and engineering of these new facilities, and overseeing the rollout of the various projects. The NHP has received withering criticism from various parliamentary bodies, and has not prospered. The programme limps on, but delivery of projects is slow and patchy. Worst of all, the NHP hospitals are only a small subset of the many deserving cases across the country, and North Tees is not on the NHP’s radar.
The fact is that, since the end of the era of PFI-financed hospitals – actual new hospitals! – successive governments have failed to create a strategic plan for the medium or long term when it comes to major healthcare infrastructure projects. This is not to say that no new hospitals have been delivered in England since 2010. Some have, but not at a rate that adequately replenishes the stock of buildings that are moldering. Furthermore, there is no evidence of a rational, evidence-based, strategic approach to renewing the health estate. Parcels of capital are made available, from time to time, and trusts have to rush to apply, using business cases that have been sitting in desk drawers for years. No one really understands how the eligibility criteria are applied, or why some projects are green-lighted while others are not.
The DHSC has a department known as NHS Estates and Facilities. This used to be a large and relatively well-resourced unit, comprising experts in planning, designing, constructing and maintaining all kinds of healthcare buildings, from the largest hospitals to the smallest GP practices. The same team were consulted on the future pipeline of healthcare facility renewal, and maintained the suite of specialist documents that describe the standards for building hospitals. Towards the end of the PFI era, and when the austerity years were upon us, the DHSC decided to downsize the department. Hundreds of employees, who had been available to advise government and individual hospital trusts, were let go, to continue life in retirement or as private sector consultants. The few dozen who remained had their hands full, trying to offer the same service with far fewer people.
The opacity of the decision-making process for capital investment in hospitals, plus the lack of in-house advisory capacity, already ensures a lack of a coherent, rational and evidence-based strategy for replacing England’s ageing hospital stock. Add to that the parlous state of the nation’s finances, and a reluctance to add to government borrowing, and you have a perfect storm of investment shyness. Capital projects are only approved, it seems, only in fits and starts, or when there is the threat of catastrophe if they are delayed.
Is there a way forward for a new North Tees hospital?
However the new hospital issue plays out, it will have to respond to current and future reality. Here are some of the key features of that landscape.
UHT milk
The first slice of reality is the existence of the UHT group and its ambition for horizontally integrated clinical services. This means that a new hospital – any new hospital in the Tees Valley – will have to show projected benefits for patients from Stockton-on-Tees, Hartlepool, Middlesbrough, Redcar and Cleveland, and parts of east Durham and north Yorkshire. The notion of the general hospital that serves a mostly local community is over, whether you agree with that or not. The UHT group will have to milk the general-hospital-for-whole-system-benefit angle for all its worth.
Neighbourly relations
The second key reality check is the current policy for neighbourhood health frameworks. Rather than healthcare being provided in silos – GPs, community teams, hospitals, mental health units – the health of people living in the Tees Valley will be the collective responsibility of a whole system of providers, working in concert with local authorities, public health and the third sector. That’s the theory, anyway, and it is likely to be backed up with reforms to payment and governance mechanisms. The role of a new hospital in contributing to an overarching, system-wide ambition for improved population health will have to be front and centre in any request for capital investment.
Where is the money?
Third, there is the vexing issue of where the cash for investment could come from. There are only two possible sources: the public purse, and private finance. (There is a third – private philanthropy – but good luck getting Amazon or Google to stump up £700M for a new hospital.) If the former, the money comes from the Treasury, via government bonds that are sold to ‘the market’ for future returns of interest payments. If the latter, the DHSC and Treasury authorise NHS trusts to enter into loan agreements with private financial institutions, again resulting in long-term repayments of interest and capital.
There are various ways to tinker with the above finance options, to achieve slightly better terms. A pension fund, with its need for stable, long-term income streams, might offer a lower interest rate than an investment bank. Maybe it’s possible to offset somehow the cost of capital with a share in any operational surplus. Perhaps there are advantages to mixing and matching public and private contributions. But in the end, the capital for investment has to come from somewhere, and it and the interest have to be repaid. When hundreds of millions of pounds sterling are in play, this is the ‘sudden intake of breath’ moment, which often results in a reluctance to take the decision to invest.
How to get there from here
I have worked for 20 years with people who have in-depth experience and knowledge in planning, designing, building and financing hospitals. I have written academic articles and book chapters on this topic, presented papers at conferences, sat on and chaired committees with various roles in hospital development, and helped to run a pan-European knowledge sharing network that brings together all the expertise you need to successfully construct and operate new hospitals.
I do not say this to boast. I say it to explain why I can offer a few lessons that might help to get a new North Tees hospital over the line. Here they are.
Read the Green Book, and understand it
All publicly funded health systems have some set of rules for capital investment requests. These rules may be a model of clarity, or somewhat opaque. They may offer guidance or instruction. They may run to hundreds of pages, or just a handful. They may represent reality, or be just a convenient fiction.
The English NHS is no exception. In our case, the rules are contained in the Treasury’s Green Book, which, in broad terms, explains how to make the case for any proposed capital investment in public infrastructure – including, of course, healthcare buildings. The Green Book further outlines the processes that should be followed and the key ‘asks’ of the body that is proposing the investment. It is written in clear, unambiguous prose, and it offers excellent guidance.
It is surprising how often hospital organisations everywhere come late to the realisation that their lovely plans for new infrastructure will be very closely scrutinized by senior government officials, particularly in the finance ministry. This is a costly mistake, and trying to retrofit justifications in Green Book language to a previously agreed scheme will be found out in no time.
The lessons is that you have to consider the requirements of the Green Book at every stage, and you should use this process to answer a series of fundamental questions: how will the new hospital advance population health; how will it enable integration of the services contained in the neighbourhood health framework; how will advance the quality of clinical practice; what will it contribute, additionally, to the local economy; what will it do for future resilience of the healthcare system? And many others….
I would suggest that those tasked with putting forward the case for a new North Tees hospital should read the Green Book from cover to cover, and memorise it until it invades their dreams. If necessary, put together a team of people who have been there and done that, to critique the plans from a Green Book perspective, and who can advise on how to fine-tune the case to answer every question that the Green Book can ask.
Don’t be scared of all the zeros
When, as a board, you get to the point where your finance director and head of estates come to you and say “We are going to ask for an investment of £700,000,000”, do not flinch. Do not be tempted to immediately reply with “I’ve heard the department won’t accept proposals for anything over £550mn”, or “Can’t we ask for a bit less and then put in a separate bid for the outpatients department”, or any other similar comment.
Most of the expense – around 70% – of running a hospital is staff salaries and associated on-costs (pensions, NI, etc). For a hospital like North Tees, with an annual budget of approximately £500mn a year, that equates to around £350mn. The rest of the budget is for drugs, equipment, maintenance, supplies, insurance and business rates. If the capital cost of a new, medium-sized general hospital is £700mn, that means that the value of the capital investment is matched by the cost of running the hospital in just over one year. Over a 40-year lifespan, the capital cost of a hospital is therefore negligible when compared with the cost of operating it – even when you factor in interest repayments.
It therefore makes no sense to obsess over the amount of capital to be invested. No one is suggesting profligacy with public money, which should be spent wisely and well, but the borrower should absolutely ensure that the proposed investment will deliver the clinical services that are needed now and in the future. This is the message that should be forcefully and convincingly delivered by the strategic and business cases, and if that implies investment for future flexibility and resilience, then so be it. No cheese paring!
Build a consortium of partners across the system
It is a mistake to confine the early plans for a new hospital to the organisation which will own and operate the facility. It is very tempting, as a hospital board, to keep your thoughts to yourself, until you have reached what you feel is a solid and unarguable case. Mistake. The case will inevitably be much less solid, and much more arguable, if you have not brought external partners along with you every step of the way.
Even if you can keep plans under wraps until after Treasury and DHSC sign-off, the challenges will come thick and fast as soon as local councillors and MPs, patient groups, other trusts, primary care practitioners, and even your own staff, have sight of your proposal. At best, you will lose a lot of time facing down the objections; at worst you will be embroiled in lengthy disputes that eventually bring down the project.
Much better to give some genuine, early ownership of the plans to as broad a range of people as possible. You cannot please everyone, but you can build a consensus, and that will save a lot of trouble later on.
Trust the experts and be a good client
For the senior management of a hospital, a major capital investment is likely to be a once-in-a-career event. Most will have no experience of the processes and the pressure involved. But they are senior managers, and will therefore probably feel that this is a challenge they should relish. This is a good thing – they will need to be resilient and committed – but their enthusiasm should be tempered by humility. The UK is fortunate to have many professionals with relevant expertise in planning, design, construction, engineering, finance and procurement, who can be brought in to advise and guide as necessary. Make use of them at every stage.
Most hospitals are built by a consortium, comprising a lead architectural and design firm, a lead construction partner, and a number of other companies to handle engineering, procurement of specialist equipment, legal and contractual matters, and so on. All of these organisations want you, the hospital client, to be well-informed, clear in your objectives, realistic and responsive. The project really is a partnership, to be in place for many years, and being a good client is an essential part of that. If you can achieve a fruitful working relationship with the other partners at an early stage, this will help greatly to overcome the inevitable bumps in the road ahead. Be open and honest about your expectations as a client, and admit your doubts when they arise. Finally, as a client, it is your responsibility to insist on spending enough time at the start of the investment programme on getting the concept right. Changes made later will be costly in money and time.
Avoid the white elephant
The fundamental aim of a new hospital should be the construction of a facility that is good for the local health economy and designed with an eye on continuous performance improvement. That does not mean that it has to be the most innovative and eye-catching hospital in the country. Far too many hospital investments end up with a grand-but-pointless atrium, unused spaces and half-used or rapidly superseded technologies. Keep your focus on the features that are really going to support the services for patients and ensure happy, productive staff, and you minimise the chance of paying for an expensive white elephant. Future Directors of Finance will thank you.
The art of the possible
A new North Tees hospital should not be a pipe dream. We know that the existing buildings have been in place for 50 years, that they are in a poor state and that this undermines the ambitions of the trust for the best possible patient care. For these reasons alone it would be reasonable to expect investment in a new facility. Add to this the opportunity for a new, modern hospital to be the lynchpin in a fully integrated local health economy, and the proposal looks convincing. Or does it?
Any number of other areas in the country could make the same arguments, thanks to nearly 20 years of underinvestment in the physical infrastructure of the health service. Some hospitals are arguably in an even worse condition. Just saying ‘it’s our turn’ won’t cut any ice with Whitehall.
What could make a convincing case, however, is the scope and quality of the argument for the investment. Go back to the essence of current government policy – hospital to community, analogue to digital, sickness treatment to prevention – and make your investment proposal the poster-child for achieving these aims. Find people who know how to do this, who have a solid track record, and use them.
Show how the existence of the new hospital will reset the relationship with other care providers, reshape clinical practice and move care delivery closer to the community. Have SMART goals (Specific, Measurable, Achievable, Relevant and Time-Bound) front and centre. Pull in your partners from every corner to contribute and comment and commend.
Build the digital case from the word go, but aim to under-promise and over-deliver, and to use tried and trusted tech throughout. An all-singing, all-dancing electronic patient record system looks wonderful in the brochure, but if it won’t talk to the other system up the road, or falls over on day one, it is neither use nor ornament.
Make a compact with the citizens of Teesside: if we move heaven and earth to get the investment for a new hospital, you have to help us by taking more responsibility for your own health. Make it a challenge – let’s get Teesside living well within a decade. The UHT group employs 20,000 people, and they can lead the way in losing weight, eating better, being more active and listening to medical advice. Add in their families and friends, and you have 100,000+ ambassadors for prevention of ill health. Get them to sign up, and put that in your strategic case.
There is enough knowledge and expertise among hospital staff, primary care practitioners, community groups and public health teams to make this a reality, but it needs joined up leadership and a coordinated, whole system effort.
And finally…
There is a distinct possibility that one scenario for the redevelopment of the existing North Tees hospital site is piecemeal construction of some more modern facilities, built over many years and subject to occasional delays or cancellations, as drip feed financing allows. These would have to be constructed alongside the existing, working hospital, and to somehow integrate with the older structures. Better than nothing, one might say, but hardly inspiring or optimal.
We should demand better.
But demanding is one thing; getting DHSC and Treasury agreement is quite another. A cast iron commitment to funding an entirely new North Tees hospital will require top class strategic and business cases, presented by a credible coalition of local partners, backed by unassailable arguments to show an ideal fit with government policy.
What are we waiting for!?
