2.7 The Department faces challenges in managing the capital funding process to ensure the capital limit is not breached. These challenges include:
• NHS foundation trusts not in financial distress only need to report significant capital spending (for example, more than 10% of income) to NHSE&I and the Department. Therefore, the absence of a limit for capital spending by NHS foundation trusts can result in delays in approvals for NHS trusts (and NHS foundation trusts in financial distress), as the Department balances capital spending to ensure the limit is not breached.
• The Department needs to prioritise competing demands for capital when NHS provider plans exceed the limit. NHS providers have, from 2016-17, consistently assessed their need for capital funding as greater than the funding available. The total capital investment requested by providers has been, on average, £1.1 billion more than the limit set in each year from 2016-17 to 2018-19. In 2019-20, it was £1.7 billion higher (paragraph 4.4).