The UK government’s launch of Neighbourhood Health Services marks a bold reimagining of healthcare delivery, moving it from hospitals into the heart of communities. Beyond its health implications, this policy could become a transformational force for urban regeneration, especially when viewed alongside the government’s wider economic agenda.

Neighbourhood Health Services: A Catalyst for Urban Renewal

Neighbourhood Health Services offer a new kind of anchor institution: permanent, essential, and people focused. By embedding health hubs in city and town centres, they can repopulate underused buildings with vital services, increase daily footfall from patients, staff, and carers, and support local businesses through spillover spending. Unlike traditional retail, which often relies on seasonal peaks, health services attract consistent foot traffic throughout the week, benefitting surrounding shops, cafés, and service providers.

The government aims to deliver up to 70% of outpatient care outside hospitals by 2035, including diagnostics, mental health, and rehabilitation services. Neighbourhood Health Services are designed to complement, not replace, Community Diagnostic Centres and GPs, offering continuity of care and broader support services. While Community Diagnostic Centres focus on imaging, blood tests, and scans and are often co-located with hospitals or retail parks, Neighbourhood Health Services provide a broader scope of care, including mental health, rehabilitation, social care, and prevention, delivered by multidisciplinary teams embedded in communities. GPs will form part of multidisciplinary neighbourhood teams. The plan also includes training thousands more family doctors, suggesting both expansion and redistribution of the workforce. 

The table below highlights the key differences between Neighbourhood Health Services and Community Diagnostic Centres.
Neighbourhood Health Services Community Diagnostic Centres.

Beyond their clinical function, these centres are designed to serve as engines of local renewal. Neighbourhood Health Services can also help revive high streets by occupying vacant retail units, reduce pressure on A&E by offering urgent care alternatives, improve public health through localised prevention services, create jobs in health, care, and support services, and strengthen social cohesion by co-locating services like debt advice, mental health support, and community groups.

If implemented well, Neighbourhood Health Services could be a game-changer for towns and cities. They offer a rare opportunity to repopulate high streets with essential, non-retail services, improve public health outcomes through prevention and early intervention, create stable, skilled jobs in health and care, and strengthen civic identity by turning health hubs into community anchors. This model aligns with broader goals of levelling up, reducing regional inequalities, and revitalising local economies. It also supports the shift toward 15-minute neighbourhoods, where essential services are accessible without a car.

The benefits can only materialise if local authorities are empowered and resourced to lead implementation, the NHS addresses workforce shortages and digital exclusion, and communities are genuinely involved in shaping services. 

Neighbourhood Health Services represent a bold opportunity, but their success will depend on strong local leadership, inclusive design, and sustained investment.

Health Outcomes: The Case for Change

The need for reform is urgent. According to the “Public Health Outcomes Framework – May 2025” and “NHS Outcomes Framework – NHS England Digital”: 

• Healthy life expectancy in England is just 61.5 years for men and 61.9 for women
• People in the most deprived areas spend over 19 years longer in poor health than those in the least deprived
• Emergency hospital admissions for infectious diseases are nearly twice as high in the most deprived areas
• Obesity affects over 26% of adults, and smoking remains the leading cause of preventable death
• Mental health-related hospital admissions have risen by 12% since 2020, especially among young adults

These figures underscore the urgency of shifting care closer to communities. Neighbourhood Health Services aim to reverse these trends by shifting care:

• From hospital to community
• From treatment to prevention
• From analogue to digital

However, this shift is not without its challenges. The model’s reliance on digital-first care could aggravate inequalities for those without internet access or digital literacy, particularly older adults and low-income households. The top-down nature of the rollout raises concerns about whether communities will have a real say in shaping the services they receive. And while capital investment is welcome, the long-term sustainability of operational funding remains uncertain, especially for local authorities already under financial strain.

Alignment with the Industrial Strategy

The Industrial Strategy (June 2025) sets out a 10-year plan to grow frontier industries like life sciences, clean energy, and digital technologies. Neighbourhood Health Services complement this by:

• Creating local demand for health tech and diagnostics
• Supporting clinical trials and innovation in community settings
• Providing stable employment in health and care sectors, especially in towns hit by industrial decline

Infrastructure Strategy Synergy

The 10-Year Infrastructure Strategy (June 2025) prioritises long-term investment in social infrastructure, including health, housing, and transport. Neighbourhood Health Services align with this by:

• Using existing urban infrastructure more efficiently
• Encouraging active travel and walkable neighbourhoods
• Supporting mixed-use developments that combine care, housing, and retail

Backed by the Spending Review?

The 2025 Spending Review commits to a 2.3% annual increase in departmental budgets and sets capital investment plans through 2030. It includes:

• Funding for cutting hospital waiting lists
• Investment in community-based care
• Support for local growth plans and regeneration

However, the “NHS Digital and the Health Foundation” reported in early 2025 that the NHS is currently facing over 110,000 staff vacancies. Without a parallel strategy to recruit and retain healthcare professionals, even the best-designed neighbourhood hubs may struggle to deliver on their promise.

How can LSH help

As a property consultancy advising on city and town centre regeneration, economic development, and place-based investment, we are uniquely positioned to help our clients unlock the potential of Neighbourhood Health Services. We can support local authorities, NHS partners, and developers by:

• Identifying and repurposing underused assets such as vacant department stores, retail units, or civic buildings for health hub use
• Advising on site selection and viability, ensuring health services are embedded in accessible, high-footfall locations that support wider regeneration goals
• Facilitating public-private partnerships to co-fund and co-deliver mixed-use schemes that combine health, housing, and community infrastructure
• Integrating health infrastructure into local growth plans, ensuring alignment with planning policy, infrastructure funding, and economic strategy
• Quantifying social and economic impact, helping clients demonstrate how health-led regeneration can improve wellbeing, reduce inequalities, and stimulate local economies

By bridging the gap between health policy and place-making, we can help shape a new generation of city and town centres: ones that are healthier, more inclusive, and economically resilient. 

Neighbourhood Health Services are more than a health policy, they are a place-based opportunity to reshape how we live, work, and care. As this vision takes shape, we are ready to help our clients lead the way.

i https://www.gov.uk/government/statistics/public-health-outcomes-framework-may-2025-data-update?8XADQ,AMCDHC,117NTV,1

ii https://digital.nhs.uk/data-and-information/publications/statistical/nhs-outcomes-framework