The aim of this funding is to bridge the gap until the NHS funding model can accommodate the increased demand caused by a growing population. While many section 106 contribution applications submitted on behalf of NHS bodies have been approved without opposition, a recent case has raised questions about the legal obligations of developers.
University Hospitals of Leicester NHS Trust (the Trust) challenged Harborough District Council's (the Council) decision to grant planning permission for a proposed 2,750-house development. The Trust requested £914,000 to fund healthcare and additional resources necessary to cope with the influx of patients during the first financial year following the development. The Council, however, refused to impose the requested contribution on the developer. In R (University Hospitals of Leicester NHS Trust) v Harborough District Council [2023] EWHC 263 (Admin), the Trust was required to prove the existence of a funding gap specifically attributable to the new housing development. If no funding gap could be demonstrated, no s106 contribution could be justified.
The Trust argued that their funding is annual and tied to patient numbers from the previous year. Therefore, if a new development led to an influx of patients, they wouldn't be funded for these 'new' patients until the next year. The core of the Trust's argument was that its funding primarily comes from local NHS commissioners who don't account for new residents in their funding. However, the Judge found that projected population growth is indeed considered when allocating funds to Integrated Care Boards (ICBs). While the ICBs aren't funded for new residents in a specific area, their overall funding includes an element for population growth and so when a new development is approved to accommodate the expected population growth, it is already factored into future NHS funding. The Trust attempted to counter this by arguing that NHS rules prevent this funding from being passed to a local Trust.
The Council argued that the Health and Social Care Act 2012 mandates ICBs to consider new residents when determining block contract payments, eliminating the need for additional funding. The Judge's key finding was that the Trust could negotiate to eliminate the funding gap if they chose to, which led to the rejection of the Trust's case.
This approach was further affirmed by Holgate J in a similar case, R (Worcestershire Acute Hospitals NHS Trust) v Malvern Hills District Council & Ors [2023] EWHC 1995 (Admin), which was also dismissed.
So, where does this leave NHS revenue funding applications in the realm of planning? While the door is open for potential legal objections to such planning conditions, it's now considerably more challenging for NHS bodies to secure these s106 contributions. They must demonstrate a future funding gap, which as highlighted by these recent cases, is no easy task. Moreover, even if a gap is proven, planning authorities may exercise discretion in refusing to incorporate these obligations.
In conclusion, the recent court decisions have made it harder for NHS revenue funding conditions to be included in planning consents. The Trust in the Harborough case has not sought permission to appeal, and the outcome in the Worcestershire case remains uncertain. These judgments are not strictly binding but are influential, which means fewer NHS revenue funding conditions are likely to be imposed in future planning consents.