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Market Forecast, NHS IT spend in the UK, 2015–21

Jul 2016

This market forecast for NHS IT spending in the UK is being published at a time of considerable uncertainty for the health service, its finances, and its technology response. The NHS in England has known that it was likely to come under considerable financial pressure since 2008, when its former chief executive, Sir David Nicholson, warned that it needed to find “unprecedented” efficiency savings to bridge a growing gap between funding and demand.

However, that pressure is now becoming acute, with the hospital sector finishing the first year covered by this report some £2.5 billion in deficit, even as it was due to deliver 2% efficiency savings towards bridging the funding gap, which is now projected to reach £30 billion by 2020-21 without significant action. 

So far, healthcare IT spending has held up well, with acute trusts investing in electronic patient record systems to complete the agenda left unfinished by the National Programme for IT in the NHS, in systems with proven efficiency and safety benefits, and in some newer technologies to share information across healthcare systems. 

At the same time, the government has set ambitious ‘paperless’ targets for the NHS in England and indicated that some funding will be available for meeting them. So the big questions for this report are whether local NHS bodies will continue to spend on IT, and whether the latest tranche of national funding will be delivered. 

Digital Health Intelligence believes that local IT spend will continue to grow; although the mix between spend on staff, software and services will change, as outlined in the sections on IT spend by English acute trusts, which are the main focus of this report. 

However, we believe there is considerable doubt about the scale and timing of national IT spending. particularly in England, which will affect the scale and speed of healthcare IT investment. 

Despite this, NHS IT spend is likely to increase as a proportion of overall NHS spend over the forecast period; underlining the pressing need to invest in technology that can deliver effective transformation to meet the challenge posed by those underlying financial pressures.