Projects halted

NHS spending ban a ‘hammer blow’ for supply chain

Willie Rennie: last-ditch decisions

A ban on new building projects for the NHS has been described as a “hammer blow” that will hit jobs and the supply chain across Scotland.

Health boards have been told to halt all spending on capital projects for “at least” the next two years, a move that has been greeted with dismay across the construction and recruitment sectors.

In Lothian, there there will be no replacement for the Princess Alexandra Eye Pavilion, a new cancer centre at Edinburgh’s Western General Hospital and the elective treatment centre at St John’s Hospital, Livingston.

NHS staff were already preparing for news about a recruitment freeze after the spending block emerged in the Scottish budget.

Daily Business reported yesterday that some firms, including recruitment agencies, have been forced to cancel contracts and withdraw job offers after receiving letters outlining the suspension of spending.

One recruitment agency boss expressed alarm at the decision. Chris Peace, founder of Peace Recruitment, said: “How are businesses meant to plan and consider resource management when the rug can get pulled from under your feet like this?”

Niall Gallagher, areas operations manager at CBRE Global, said: “Not only is this terrible news for the construction, services and facilities industry it is a horrible stain on the forecast of the future of the NHS nationwide.”

NHS Lothian director of finance, Craig Marriott, issued a statement saying: “New construction projects are dependent on approval and funding from the Scottish Government.

“Following the Budget announcement in December, the Scottish Government advised NHS boards to immediately stop any project development spend as the Scottish Government does not anticipate starting construction of any new capital projects over the next two years at least.

“Staff and partners are being made aware of the current picture and will be kept updated.”

The Scottish Government said it had been forced into the decision because its capital funding position is “extremely challenging”.

Opposition MSPs accused ministers of financial mismanagement and called on the First Minister and Health Secretary to set out their plans.

Scottish Liberal Democrat economy spokesperson Willie Rennie said: “After years of mismanaging the public purse, it seems the SNP are having to make desperate and last-ditch decisions that threaten jobs and undermine both the supply chain and the provision of high-quality healthcare.   

“Rather than delivering these hammer blows, Scottish Liberal Democrats would reverse years of decline and grow our economy to properly invest in public services.”   

Scottish Conservative shadow health secretary Sandesh Gulhane added: “This is another hammer blow for Scotland’s NHS.

“Our health service is already hopelessly overstretched due to the SNP’s woeful workforce planning – and now it is set to pay for the Nationalists’ financial mismanagement, too.

Sandesh Gulhane: mothballing projects will be ‘devastating’ (pic: Terry Murden)

“Despite record UK Government block funding, the SNP’s years of wasteful spending and sluggish growth has created an enormous black hole in Scotland’s finances, leading to last month’s tax-and-axe budget, and now the shelving of new NHS building projects.

“Humza Yousaf’s flimsy Covid recovery plan rested on new treatment centres being built across the country to reduce waiting lists.

“If some of these are to be mothballed, it will be devastating. The First Minister and his discredited successor as health secretary must come clean on what they are planning.”

The Scottish Government said: “As set out in our draft budget the capital funding position is extremely challenging.

“The UK Government did not inflation-proof its capital budget which has resulted in nearly a 10% real-terms cut in the Scottish Government’s capital funding over the medium-term between 2023-24 and 2027-28.

“Our emphasis for the immediate future will therefore be on addressing backlog maintenance and essential equipment replacement.

“We will bring forward a revised Infrastructure Investment Plan in the spring, alongside the medium term financial strategy, at which point we would hope that the fiscal outlook will be clearer.”

One Comment to NHS spending ban a ‘hammer blow’ for supply chain

  1. I personally have had the meeting informing me my position will be terminated due to the funding withdrawal. Some colleagues have already gone and more told the bad news. Absolutely devastating in many ways but more so the state of the hospitals we are working on trying to improve conditions for staff and patients. I love doing the worthwhile works in the NHS….. this country is past saving… it is gasping its last few breaths

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