Spending Review 2025 (SR25): Significant investment in Healthcare Technology across the NHS

Lloyd Price
2 hours ago
5 min read

The Spending Review 2025 (SR25), announced on June 11th, 2025, sets out the UK government’s public spending framework for 2026/27 to 2028/29, with capital budgets extending to 2029/30.

A key focus is a significant investment in healthcare technology across the NHS, aimed at modernising services and supporting the government’s Plan for Change.

Below is a summary and analysis of SR25’s provisions for healthcare technology in the NHS based on yesterday's announcement by the Chancellor, Rachel Reeves.

Summary of Healthcare Technology Provisions

£10 Billion Investment in NHS Technology

SR25 allocates up to £10 billion by 2028/29 for NHS technology and digital transformation, a 50% increase from 2025/26 levels.

Key initiatives include:

Enhancing the NHS App to improve patient access to services, such as appointment booking and health record management.

Developing a single patient record system to streamline data sharing across NHS providers.

Expanding the Federated Data Platform to integrate data for better care coordination and operational efficiency.
Digital Transformation Goals

The investment supports the NHS’s shift from analogue to digital systems, one of three priority shifts outlined (alongside hospital-to-community care and treatment-to-prevention).

Specific projects include digitising patient records, upgrading IT infrastructure, and leveraging technology to reduce administrative burdens and improve service delivery.
Efficiency Savings Through Technology

The Department of Health and Social Care (DHSC) is tasked with achieving £9 billion in efficiency savings by 2028/29, with technology playing a central role.

The Office for Value for Money (OVfM) identifies technology-driven efficiencies, such as reducing administrative costs by 15%, as critical to sustaining the NHS’s £29 billion overall funding increase (3% real-terms growth annually).
Workforce and Infrastructure Support

The funding aims to equip the NHS workforce with tools to deliver care more effectively, including training for digital systems.

However, capital budgets for physical infrastructure (e.g., hardware and facilities to support tech upgrades) remain largely unchanged from the Autumn Budget 2024, potentially limiting implementation.

Analysis of Impacts on Healthcare Technology

Transformative Potential

The £10 billion investment is a landmark commitment to NHS digitalization, addressing longstanding issues like fragmented IT systems. A single patient record could improve care continuity, reduce errors, and enhance patient experience, aligning with global best practices in healthcare technology.

Expanding the NHS App could empower patients, reduce administrative workloads, and support preventive care by enabling self-management of health conditions.

The Federated Data Platform’s expansion promises better data analytics for population health management and resource allocation, potentially reducing hospital admissions through proactive care.
Implementation Challenges

Workforce Readiness: The Royal College of Nursing (RCN) and NHS Confederation highlight that successful digital transformation requires significant staff training. Without adequate investment in upskilling, new systems may underperform or face resistance from overworked staff.

Interoperability: Integrating legacy systems into a single patient record or Federated Data Platform is technically complex. Past NHS IT projects, like the National Programme for IT, faced delays and cost overruns, raising concerns about delivery risks.

Capital Constraints: Flat capital budgets limit investment in physical infrastructure (e.g., servers, cybersecurity measures), which could bottleneck digital projects. The King’s Fund notes that inadequate capital funding also threatens broader NHS infrastructure modernisation, indirectly impacting tech deployment.
Efficiency vs. Quality Trade-Offs

The £9 billion efficiency target relies heavily on technology to cut administrative costs and streamline processes. While automation and data integration can reduce waste, aggressive targets risk prioritizing cost savings over care quality if systems are rushed or underfunded.

The Institute for Fiscal Studies (IFS) warns that health spending’s dominance (39% of day-to-day budgets) squeezes other sectors, potentially limiting cross-government support for tech-related initiatives like cybersecurity or broadband infrastructure, which the NHS relies on.
Long-Term Vision and Risks

The technology investments align with the forthcoming 10-Year Health Plan, expected in 2025, which will outline a roadmap for digital transformation. However, without clear milestones and accountability, the £10 billion risks being spread too thinly across competing priorities.

Cybersecurity is a critical concern. Increased digitisation, especially via the NHS App and cloud-based platforms, heightens data breach risks. SR25 lacks explicit mention of cybersecurity funding, which could undermine public trust if not addressed.
Equity and Access

Digital initiatives like the NHS App could exacerbate inequalities if not paired with efforts to address digital exclusion (e.g., among elderly or low-income groups). SR25 does not detail specific measures to ensure equitable access to new tech tools.

Community care shifts supported by technology (e.g., remote monitoring) could reduce hospital pressures but require robust broadband and device access, particularly in rural areas.

The Spending Review 2025’s £10 billion investment in NHS technology is a bold step toward a digital-first healthcare system, with potential to improve patient access, care coordination, and operational efficiency through tools like the NHS App, single patient records, and the Federated Data Platform. However, success hinges on overcoming challenges like workforce training, interoperability, and limited capital budgets. The £9 billion efficiency target underscores technology’s role in cost savings, but risks compromising quality if poorly executed. The 10-Year Health Plan will be crucial for providing a clear strategy, while addressing cybersecurity and digital equity is essential to maximize impact.

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