The investment boom that has seen independent sector mental health hospital capacity leap by 35 per cent in the last 5 years is set to come to an end as a result of the credit crunch according to a report from health care market intelligence specialists Laing & Buisson.

The report reveals that independent sector now provides almost one quarter of all mental health hospital capacity in the UK, with the remainder provided by the NHS. The driving force behind the expanded role of the independent sector in supplying mental health services for the NHS has in recent years been the need to develop accommodation that meets the special needs of service users.

This has led to the independent sector developing medium secure facilities catering for special needs including women, people with learning disabilities and autistic spectrum disorders and even deaf people.

Although NHS budgets will get tighter as the recession takes grip there is likely to be little reduction in immediate demand, but in the present financial climate new bank lending has all but dried up and it has become difficult to raise capital, There is also an expectation that mental health hospital sector capacity will plateau in 2010, after pipeline projects have worked their way through in 2009.

The NHS is unlikely to expand capacity either, since capital projects are the first to go in difficult times. This will particularly affect the medium secure sector, which houses patients who may be a danger to themselves and others.