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Budget 2025: Extra NHS IT cash welcome, but plan lacks clarity
Industry and healthcare leaders are concerned that NHS tech funding is too focused on already approved platforms, fails to tackle core issues and lacks a clear delivery plan
Chancellor Rachel Reeves’ 2025 Budget promise of £300m additional capital investment in NHS technology was welcomed by healthcare leaders and industry, but critics fear the funding is too modest and unlikely to deliver the productivity gains intended.
Reeves announced the extra £300m in capital funding as part of plans to boost productivity and improve patient outcomes, building on the £10bn allocated for digital spending as part of the 2025 Spending Review.
However, there are concerns that the funding package will do little to ease pressures on an already crumbling NHS, and that the scope of the funding is too narrow.
Sarah Woolnough, chief executive of think-tank the King’s Fund, said the £300m for technology investment is “welcome in showing the government’s focus on improving efficiency, but in the context of the previously announced £10bn over three years investment in this area, it is a relatively small sum”.
Another think-tank, The Health Foundation, also believes that while the investment in digital infrastructure is welcome, capital spending remains constrained after years of underinvestment.
“The NHS’s maintenance backlog – including urgent repairs to avoid injury – currently stands at £15.9bn, and growth in capital spending is still constrained after years of underinvestment that put us behind health systems in comparable countries,” Health Foundation’s director of policy and research, Hugh Alderwick, said.
“Tackling NHS waiting lists was one of the chancellor’s three priorities for the Budget, but making this happen will be tough with the resources on offer,” he added. “Most of the additional day-to-day funding for the NHS already announced in the Spending Review will be eaten up by rising costs, like pay growth and meeting rising demand – as well as the costs of the government’s own NHS reorganisation.”
Another concern is that the funding is too focused on projects and platforms that have already been centrally approved by the government, rather than fixing a crumbling infrastructure.
Analysis of the budget by the NHS Confederation found that while the technology capital is intended to deliver a 2% productivity growth each year of the Spending Review period, the announcement was too focused on already approved programmes, such as the NHS App and the roll-out of the Federated Data Platform (FDP).
“While the capital investment is new, its scope is limited and signals further ring-fencing. There is insufficient detail on how funds will be allocated to emerging priorities or critical gaps,” the analysis said.
“Without clear visibility, it is difficult to determine whether this investment addresses essential areas such as interoperability, cyber security and digital inclusion, or structural constraints to NHS digital transformation, including fragmented governance across integrated care systems and trusts, legacy systems that are costly and difficult to integrate, and significant workforce digital skills gaps that could undermine adoption of new platforms.”
Clear plan needed
Industry is largely positive about the funding, as it provides opportunity for businesses. However, they also recognise that throwing money at NHS technology is not a silver bullet, and that shiny new technology will do little if the basic plumbing isn’t fixed.
Dynatrace regional vice-president for the UK and Ireland Martin Bradbury said the funding is a “welcome boost”, but he added that “equal focus must be placed on ensuring these digital systems are secure, resilient and able to perform reliably under pressure”.
“Recent widespread internet outages have shown how disruptive failures in digital services can be. If similar IT issues were to affect healthcare platforms, it would not only erode public trust, but could also undermine patient safety,” he said.
Overall, the technology sector sees the funding as a sign of renewed focus on productivity and digital, which can ease pressure on frontline staff and reduce administrative burdens, but only if implemented correctly.
Guy Dickie, head of healthcare at Iron Mountain UK, said the funding is a step in the right direction, but that there needs to be “a unified approach to digitisation across all NHS trusts”.
“Paper records continue to slow down decision-making and restrict collaboration, while digital solutions have the potential to speed up diagnoses, reduce waiting times for patients, and minimise the risk of lost or damaged records,” he said.
“The increased investment announced today needs to be part of continued investment in digital infrastructure, strong governance and the upskilling of NHS staff. This will ensure new technologies are adopted effectively and securely to help cut down waiting lists.”
NHS staff organisations are less positive about the announcement by the chancellor, with British Medical Association (BMA) council chair Tom Dolphin saying this was a “tough budget” with an even greater challenge.
Aside from tech, the NHS as a whole faces unprecedented budget strains, and wider capital and revenue constraints remain unsolved.
“This was not a Budget that chose to lay better foundations for the NHS. The government may have survived a tricky fiscal event today, but risks storing up trouble for the future,” he said.
The Royal College of Physicians (RCP) welcomed the funding and recognised that having digital systems that can talk to each other is key, but that there needs to be an implementation plan in place.
“Prioritising effective implementation and interoperability will be key to realising the benefits of this new funding. Poorly implemented digital systems hinder rather than help productivity,” said Muntal Patel, RCP president.
The government also announced plans for 250 neighbourhood health centres through a combination of public-private partnerships (PPPs) and public investment.
Read more about NHS and technology:
- A Microsoft Copilot AI trial in 90 NHS organisations found that a national roll-out could save up to 400,000 hours per month.
- A Sophos report on ransomware highlights resilience improvements among healthcare organisations but warns that the wider threat is still live and growing.
- Additional functionality is being built into the NHS App to provide online appointments and access to healthcare professionals across England.
