Exclusive: National tech budget slashed by £350m to plug deficits

Last week the Treasury rebuffed NHS England’s plea for a £1bn bailout to cover the costs of industrial action so far this year, instead releasing just £100m.

It means NHSE and the Department of Health and Social Care are instead raiding capital and tech budgets to fill gaps, as well as watering down efforts to tackle waiting lists.

The full scale of the internal budget raids, and their division between NHSE and the DHSC, is still unclear. But HSJ understands tech budgets are being cut by around £350m. The total “frontline digitisation” budget is thought to be £1.9bn.

NHSE declined to provide an alternative figure but insisted the scale of the cut was “inaccurate”.

It was reported last week that allocations for electronic patient records were being slashed as a result of the deal.

Support will be “prioritised” towards the trusts without systems in place, potentially pulling support from work to extend or optimise existing EPRs, according to Digital Health.

Integrated Care Systems have also been permitted to re-purpose “sensible” underspends from previously ringfenced areas and dentistry.

However, a briefing seen by HSJ says “underspends against technology programmes including EPRs will not be available for local reuse”.

One trust chief information officer said they believed NHSE was looking to pull back funding that was committed but had not yet been spent. They added that the uncertainty around budgets, which have also been raided in previous years, was hindering the service’s efforts to improve tech infrastructure.

The CIO said: “How on earth is anyone supposed to plan digital investment when funding is verging on random?”

Rory Deighton, director of the NHS Confederation’s Acute Network, said: “Health leaders have expressed extreme frustration at being tasked at short notice with reworking budgets ahead of winter. Many of the cuts will come from vulnerable areas like dental underspend, and undercut leaders’ efforts to transform services.

“The cuts to digital budgets especially will be source of frustration. At a time when government focus moves towards productivity, cutting the innovation and investment that can make services more productive makes absolutely no sense at all.

“Continually raiding capital budgets to plugs holes in the books elsewhere is hugely short-sighted and creates an anchor dragging effect on productivity. Health leaders have ambitious plans to further embed technology so this will come as another disappointment.

“In parts the NHS has ineffective and outdated IT systems that often can’t communicate across between different care settings, often resulting in duplication of effort at the expense of staff time. Cutting tech funding will simply worsen this.”

An NHSE spokesman said: “The NHS is dealing with financial pressures due to industrial action and has allocated an additional £800m to integrated care boards for this financial year to support them with these costs – however, these claims suggesting the scale of the potential associated impacts to technology funding this year are inaccurate.” 

Updated 16:08 Monday 20th October to include NHSE statement.