FUNDING OPTIONS
Right: Inside one of the operating theatres that are part of the ‘state-of-the-art’ two-storey modular theatre and ward complex at the Royal Orthopaedic Hospital in Birmingham.
Below: A drone shot of the three-theatre centre of excellence at Neath Port Talbot Hospital, part of Swansea Bay University Health Board.
hospital operations. Usage-based revenue agreement solutions utilise revenue budgets, helping to avoid capital expenditure restraints. This enables more projects to move forward, simultaneously improving a Trust’s ability to respond to urgent healthcare demands.
Alan Wilson
Alan Wilson is the managing director of ModuleCo Healthcare (MCH), a leading provider of modular healthcare buildings in the UK. He joined the business in September 2013 as General manager, and was appointed MD in July 2019. With extensive experience in the construction and healthcare sectors, he has enhanced relationships with both suppliers and customers, while implementing standardised commercial processes. He also plays a key role in ensuring that the after-sales support and maintenance of ModuleCo Healthcare facilities remain at a high standard throughout their lifecycle. He has been instrumental in successfully delivering several projects – such as the Neath Port Talbot Centre of Excellence, and The Royal Orthopaedic Hospital Theatre and Ward Complex, among others.
What is a usage-based revenue agreement? At its core, the model enables NHS Trusts to pay for healthcare facilities based on actual usage, eliminating the need for large upfront capital investments or allocation. This innovative approach ensures that Trusts only incur costs when the facility is in use, directly aligning expenses with surgical volume and patient demand. If the facility is unused, the Trust incurs no cost, making it a powerful tool for reducing financial waste and enhancing cost-efficiency. The model provides unmatched flexibility for Trusts facing fluctuating patient volumes and evolving needs. It alleviates the burden of long-term financial commitments by offering a scalable solution that adjusts in real-time to the Trust’s requirements. Whether additional capacity is needed for a short-term solution or a longer-term project, these types of agreements allow for expansion of usage as necessary, without impacting the Trust’s CDEL.
n The benefits of usage-based revenue agreement solutions to NHS Trusts
The solution offers numerous advantages for NHS Trusts, addressing both operational and financial challenges. The key benefits are: 1. Flexible payment structure: The model’s flexible payment structure allows NHS Trusts to only pay for the facility when it is in use. This offers more accurate budgeting and effective cost management, aligning costs directly with patient activity, and ensuring that money is only spent when the facility is actively contributing to patient care. 2. Revenue budget utilisation: Unlike traditional construction projects that require significant capital expenditure, the model allows Trusts to fund new facilities from their revenue budgets. These budgets are typically more flexible and easier to manage, avoiding the need to draw on limited capital funds, and freeing those resources for other critical projects, or ensuring that projects can go ahead if capital is not available. 3. Compliant with legislation: The IFRS 16-compliant
40 Health Estate Journal June 2025
model does not affect a Trust’s CDEL. This allows Trusts to acquire the facilities they need without adding long-term liabilities to their balance sheet. 4. Rapid deployment: Speed is crucial in healthcare, especially when dealing with surges in patient demand or emergencies. Modular offsite-constructed facilities are designed for rapid deployment, with some facilities being patient-ready within as little as six weeks. This rapid turnaround enables NHS Trusts to increase their capacity in response to immediate needs. 5. HTM and HBN compliance: Modular offsite- constructed facilities are built to the highest standards, and are fully compliant with NHS HTM and HBN regulations. This ensures that all modular facilities meet the stringent requirements for healthcare buildings, providing peace of mind that they are safe, functional, and of the highest quality. 6. Increased capacity and resilience: Modular facilities offer a flexible solution that can be quickly deployed and scaled as needed, helping NHS Trusts to meet demand more effectively. This reduces patient waiting times, enhances resilience against unexpected surges, and provides crucial flexibility during peak periods like winter or pandemics. 7. Minimal site disruption: Through utilising offsite construction, up to 90% of the manufacturing is completed offsite, resulting in the delivery, installation, and commissioning being significantly quicker, whilst also reducing the number of deliveries and personnel required on site.
8. Long-term durability: Modular offsite-constructed facilities are built to last, with a 60-year design life. They provide long-term value while being rapidly deployable to meet short-term needs. These are not temporary fixes, but rather robust, permanent buildings designed to serve the NHS for decades. 9. Easy procurement: A usage-based revenue agreement solution is accessible through various compliant and robust framework agreements, such as the NHS Shared Business Services Framework, Crown Commercial Services Framework, and NHS Commercial Solutions Framework. This ensures a streamlined procurement process, saving time and resources, and enabling Trusts to implement solutions more efficiently. 10. A proven solution: Surgical capacity in a matter of weeks.
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