Chancellor targets £36bn productivity boost with £4.2bn digital transformation plan

Chancellor of the exchequer Jeremy Hunt has announced £3.4bn in additional funding for the NHS to deliver 2% annual increases in productivity through new technology and digital transformation across the health service in England.

The cash for the NHS – which Hunt claimed is doubling investment in digital transformation – is the largest part of a £4.2bn commitment to improve the productivity of the public sector, with the aim of delivering £35bn in cumulative NHS savings plus £1.8bn of savings in the wider public sector.

Many of the technology plans had been pre-briefed earlier in the week, but the chancellor’s Spring Budget statement provided further details.

The extra funding for NHS digital transformation is the latest of many previous commitments intended to reform technology across the health service. Hunt himself, when secretary of state for health in 2013, offered £4.2bn to deliver a “paperless NHS” by 2018.

A 2020 report from the National Audit Office said that plans for a digital overhaul of the NHS had been “slower than expected” and the level of funding at the time might not be “sufficient to meet the government’s ambitions”.

Hunt’s budget announcement focused on a series of proposed initiatives designed to improve productivity, including:

• Making the NHS App the “single front door” for accessing healthcare;
• Prevention and early intervention services through the NHS App, including a new digital health check;
• Delivering a “radically improved online experience” for patients;
• £1bn to “transform the use of data” to reduce time spent on administrative tasks;
• Pilots to test the ability of artificial intelligence (AI) to automate back-office functions;
• Accelerating plans for the controversial Federated Data Platform, designed to improve data analytics across the NHS.

The NHS plan will see £2bn spent on updating legacy IT, to “lay the groundwork” for greater use of AI and other new technologies, including upgrading more than 100 MRI scanners with AI capabilities to speed up test results.

The productivity plan also targets ensuring that all NHS trusts are using electronic patient records (EPR) by March 2026 – currently 90% of trusts in NHS England have already adopted EPR.

“This funding will significantly reduce the 13 million hours of time doctors spend on poor IT, freeing up significant capacity and revolutionising treatment for a range of illnesses such as cancer and strokes,” according to the Spring Budget “red book” published alongside the chancellor’s speech.

“This will double the investment in technological and digital transformation in the NHS in England and turn the NHS into one of the most digitally enabled, productive healthcare systems in the world.”

Proposals to deliver a wider public sector productivity boost include:

• £230m to pilot or roll out cutting-edge technology such as live facial recognition, automation and the use of drones, with a new Centre for Police Productivity to support forces’ use of data and AI;
• £34m to expand the Public Sector Fraud Authority by deploying AI to help combat fraud across the public sector;
• £17m to accelerate DWP’s digital transformation, replacing paper-based processes with simplified online services, and a new system for the Child Maintenance Service;
• Modernise communications from the HM Courts & Tribunal Service by bringing forward digital reforms;
• Using AI across government to reduce the need for manual scanning of paper documents;
• £6m to speed up digitisation of key services in prisons;
• £10m for digitising jury bundles in criminal courts;
• A new pilot of using AI to speed up local planning processes.

According to HM Treasury, the Public Sector Productivity Plan “marks the first step towards returning public sector productivity back to pre-pandemic levels and will ensure taxpayers’ money is spent as efficiently as possible”.

It added: “Backed by £4.2bn in funding, the plan will allow public services to invest in new technologies like AI, replace outdated IT systems, free up frontline workers from time-consuming admin tasks and take action to reduce costs down the line.”

Other Budget announcements relating to technology included a £7.4m AI upskilling fund to help small businesses develop AI skills; two pilots aimed at improving use of data and AI in education and adult social care; and £100m investment for the Alan Turing Institute over the next five years.

Rashik Parmar, chief executive of BCS, The Chartered Institute for IT, said: “This level of investment in technology across the NHS and the police is vital to improve the quality and speed of the medical service and criminal investigation.

“But funding for AI must include investment in digital professionals – people – who will work with it and lead it at all levels. They need not just high degrees of competence, but an understanding of ethical principles, which are key when using automated technology that affects our lives, like processing patient data, or responding to emergency enquiries.”