CAPITAL PROGRAMMES
Total cost of quality
Prevention Appraisal Costs of good quality
Internal failure
External failure
Costs of poor quality
The CoQ Framework is an adapted approach for assessing how strategic upfront investments (or lack thereof) in preventing errors impact overall project costs and outcomes in complex healthcare programmes.
Fig 1: The Cost of Quality Framework.
administration system (EPAS), workforce burnout, and collapsing staff morale characterised the first years of operation. Budget overruns were reported as exceeding AU$600m, and the operational company responsible for the hospital was eventually placed into administration. Staff described the transition as a “recipe for disaster” to local reporters.1 The Royal Adelaide’s difficulties were not the result of a poorly constructed building; they were the product of insufficient investment in the prevention and planning work required before the doors opened. The building was completed, but the workforce, public and health system was not.
n Royal Liverpool University Hospital The Royal Liverpool, which opened in 2022 following years of delays and the collapse of its original contractor, was designed with 640 beds – with others moved to other parts of the system. This reduction was predicated on the assumption that virtual ward capacity and community reablement services would be sufficiently developed to reduce acute demand by the time of opening. They were not. The result was well documented severe emergency department overcrowding and corridor care, with staff describing conditions to the BBC as “dreadful” and care quality in visible decline, writing a letter to management saying they were “embarrassed, ashamed, and demoralised” by the standard of care.2
The transformation Samuel Rose
Samuel Rose is a Director at IMPOWER Consulting, where he leads the firm’s work on healthcare capital programmes and complex system change. A qualified accountant (ICAEW) and leadership coach, he brings an unusually broad set of disciplines to the challenge of NHS transformation – combining financial rigour, strategic insight, and a deep understanding of the human and organisational factors that determine whether change improves outcomes.
and change the business case depended upon simply was not in place. This case illustrates one of the most challenging dimensions of NHS capital programmes: the dependency on system-wide change that lies largely outside the acute Trust’s direct control. When those dependencies are not managed, the new facility bears the consequences. After a substantial effort from the local teams, in 2025 the CQC rated the A&E as “well-led” and noted it had a “positive culture” – nearly three years after the initial challenges from opening.
n Midland Metropolitan University Hospital By contrast, the Midland Metropolitan University Hospital, which opened in 2024 as a ‘super hospital’ consolidating acute and emergency services for the Black Country, offers a more encouraging picture. Sandwell and West Birmingham NHS Trust took a proactive and explicitly named approach: ‘More than a hospital’. The Trust invested early in digital integration, implementing its electronic patient record before opening, established a system-wide transformation programme with clear governance and trajectory, and reframed its organisational identity around the principle of ‘a community trust with a hospital in it’. Early performance data suggests improved ED performance and reduced admissions, and it is more resilient to winter pressures. The Trust also recognised that it could not run an organisation
58 Health Estate Journal August 2026
Midland Metropolitan University Hospital.
and transform care models simultaneously with the same leadership team, and explored dedicated delivery structures accordingly. Importantly, the research notes that Midland Met’s success was a result of investment in transformation and out of hospital care and workforce transformation in the years ahead of opening. It is not a completed story, but it demonstrates what deliberate, well-resourced transformation leadership can achieve when it is treated as central to a capital programme rather than peripheral to it.
The Cost of quality: a framework for understanding the risk The research applies the Cost of Quality (CoQ) framework – adapted from manufacturing and engineering – to healthcare capital programmes. The framework distinguishes between prevention costs (investments made upfront to avoid failure), appraisal costs (ongoing monitoring and assurance), internal failure costs (problems identified before go-live), and external failure costs (problems that emerge after a facility has opened and patients are using it). In estates terms, this framing is intuitive. Professionals
working in healthcare estates management understand deeply that underinvestment in maintenance and assurance processes generates far greater costs downstream. The same logic applies to transformation. When programmes underinvest in the clinical, digital, and cultural change required to make a new facility work as intended, the resulting external failure costs – patient safety incidents, financial distress, workforce burnout and turnover, reputational damage, and years of operational instability – vastly exceed what adequate prevention investment would have cost. The research found that prevention and appraisal costs are consistently and significantly underfunded in NHP schemes, even where programme leaders are acutely aware of the transformation required. The reasons are systemic: Trusts are operating under extreme pressure, with limited capacity to look beyond immediate operational demands; the skills and resource required to lead complex transformation alongside a major capital programme are in short supply; and there is, as yet, no clear national blueprint for how such transformation should be embedded and managed.
Paul Raftery
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