ERIC data: what it means for the future of the NHS estate

Senior Consultant Issy Whitelock looks at what the most recent release of ERIC data tells us about the condition of the NHS.

The newly released provisional NHS ERIC (Estates Return Information Collection) data for 2023/24 gives us a telling snapshot of the NHS estate’s current state. And, as you might expect, managing buildings, infrastructure and costs is a growing challenge for NHS trusts.

Total running costs increased by 10% to £13.6 billion, continuing the sizeable upward rising trend seen over the last four years, with these outpacing revenue growth and intensifying the financial strain on the service.

Despite an increase in capital spending, reaching £11.2 billion in 23/24, this only returns capital investment levels to where they were in 2010, after years of underfunding.

Compounding these pressures, the IFRS 16 accounting standard now requires leases to be included as capital expenditure, putting restrictions on an already stretched capital budget, limiting available funds and impacting NHS trusts’ financial flexibility.

So, what’s the story this year? The NHS estate is under some serious pressure, shaped by a few key trends.

What the numbers tell us

Energy costs: Energy remains one of the NHS’s largest financial burdens, with costs rising by 13% this year, an additional £185 million. While the proportion of these energy costs resulting from gas and oil dropped by 2% compared to previous years, these sources still make up a substantial 40% of total energy spending. This highlights the NHS’s continued heavy reliance on traditional energy sources, even as it seeks to move toward more sustainable options.

Capital investment and backlog maintenance: This year saw an increase of capital expenditure by 7% to £4.8 billion, with the majority going toward acute hospital sites. Yet, backlog maintenance (BLM) has grown 18% to £13.8 billion.

The top 20 trusts with the highest backlog maintenance account for 30% of the total BLM across the NHS estate. However, only nine of the 20 trusts with the most critical infrastructure risks are included in the New Hospital Programme, highlighting a significant funding gap for urgent repairs and upgrades. High-risk and significant maintenance now makes up 56% of BLM, a 2% increase from last year. This rise demonstrates the need for critical maintenance investment to ensure patient safety and avoid service disruptions.

On a positive note, clinical service incidents due to infrastructure failures decreased by 4.8%, possibly showing trusts are focusing capital on essential areas, but at what cost?

Carbon reduction and sustainability: Sustainability remains a key goal, with 76% of trusts creating estates development strategies to support some of these ambitions. However, many trusts face a tough choice: improve energy efficiency or manage rising costs? Progress is visible in some areas with solar panel investments, EV fleets, and energy upgrades, though budget constraints limit larger-scale green projects.

Seven Integrated Care Boards (ICBs) saw a reduction in their trust’s gas emissions by over 10%, and there’s been a 38% rise in trust-owned solar power consumption, which is promising.

LED lighting is also expanding, though 1,778 sites still have less than 50% LED coverage. This could offer substantial benefits but will need capital investment.

A funding tug of war

In summary, this data paints a vivid picture of an NHS estate under growing strain, with rising costs across almost every area. Trusts are making difficult choices: fix urgent issues or invest in long-term transformations like digital upgrades and sustainability?

It’s a tough call, and the risk is that sustainability projects may be sidelined in the short term and the forthcoming risks associated with the rising BLM and critical infrastructure risk continue to grow. So, where does the funding come from to bridge this gap?

One of the key takeaways from the 2023/24 ERIC data is that while estates costs are rising, many trusts struggle to pinpoint exactly where efficiencies can be made. This is where data can make a tangible difference in managing your estate and making data driven decisions. We’ve developed a tool which allows trusts to make sense of their ERIC data to help tackle estate management and cost control challenges – by taking a deep dive into their ERIC data, our estates dashboard can help trusts benchmark performance both between their own sites and nationally, and identify opportunities for cost-saving or operational improvements.

For instance, we recently worked with an NHS trust in England, helping them uncover discrepancies in their data reporting, which were skewing their performance metrics. By correcting this and advising them on how to better utilise their space, we were able to cut down their estates spend while improving the quality of care offered to patients. These kinds of insights are vital at a time when NHS funding is tight, and making sure every pound is used effectively can have a direct impact on patient services.

If you’re interested in learning more about how to use your ERIC data to improve your trust’s performance, please get in touch for a chat.