NAO raises concerns about planning and funding for digital transformation

by Steve Brown

15 May 2020

The Department of Health and Social Care and its arm’s length bodies need to develop a better understanding of the investment required to deliver digital transformation in the NHS, according to a report from the National Audit Office.

The report was prepared before the Covid-19 pandemic hit the UK but has been published now to help the NHS as it looks to build on the progress made in implementing digital services since the outbreak.App Doctor

The NAO said progress in transforming digital services in the NHS had been slower than expected. Recent investment in digital transformation had been inadequate and it is uncertain whether current funding will be sufficient to meet the government’s ambitions because plans are based on very limited cost data.

The government committed funding of £4.7bn to deliver its Digital Transformation Portfolio between 2016 and 2021. The portfolio was launched to deliver the 2014 digital strategy. However, the NAO report said that NHS England and NHS Improvement acknowledged this was not enough to deliver everything. NHS trusts’ expenditure on IT varies widely and, collectively, less than 2% of their expenditure is on technology, compared with a recommended 5%.

Current central estimates suggest £8.1bn will be needed between 2019/20 and 2023/24: £5.1 billion from national bodies (2019/20 to 2023/24) and £3bn from trusts (2019/20 to 2029/30, with the majority in the first five years).

‘However, [these] plans are based on very limited data, it is uncertain that planned funding will be sufficient, and there is a significant risk that trusts will be unwilling or unable to fund the £3bn,’ the report said.

The report also criticised national arrangements for managing digital transformation as ‘confused’ – with the governance arrangements for NHSX still not finalised and the organisation having no statutory basis. While digital transformation is essential to the NHS long-term plan, there is no plan setting out how this will be achieved in clear detail.

Gareth Davies (pictured), the head of the NAO, said the track record for digital transformation had been poor, with key targets such as achieving a paperless NHS by 2018 not being achieved. Local organisations were using outdated IT systems and faced competing demands on resources.Gareth Davies

‘The delivery of healthcare will continue to change, and it needs to be supported by modern, integrated and up-to-date information systems,’ he said. ‘To meet this challenge, the Department and its arm’s-length bodies need to develop a better understanding of the investment required, set a clear direction for local organisations, and manage the risks ahead.’

NHS Confederation director Layla McCay, said the report was a useful reminder that there had not been enough investment in the health and care sector’s digital infrastructure. ‘The last two months has seen a digital revolution in the NHS which has brought in widespread virtual consultations, more electronic prescriptions and sharing records like never before,’ she said.

‘The universal cry from hospitals, community and mental health services and GP practices is that we must not return to where we were before Covid-19. Instead we must reset the way we think about health and care in the UK, including embracing this digital transformation, and move to where we want to be to improve services for patients.’