National Audit Office report on Digital transformation in the NHS

This report was prepared before the Coronavirus pandemic. We recognise that the Department of Health and Social Care and the NHS have unprecedented operational priorities to deal with, and we have agreed with them to publish this report because it contains valuable information that will remain relevant and help with digital transformation in the NHS in the longer-term.

Progress in transforming digital services in the NHS has been slower than expected. Today’s report by the National Audit Office has found that recent investment in digital transformation has 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.

Improving digital services in the NHS and implementing new ways of working is a huge challenge, and the previous attempt to do this, between 2002 and 2011, was both expensive and largely unsuccessful. The Digital Transformation Portfolio (the Portfolio) was launched to deliver the NHS’s 2014 digital strategy. This strategy and the Portfolio are now being updated and a new unit, NHSX, has been set up to lead digital transformation in the NHS.  

Changing digital transformation strategies for the NHS have made achieving current objectives more challenging. NHS services rely on a vast array of IT systems, many of which are aged, ‘legacy’ IT. National strategies have moved between centrally-managed and ‘hands-off’ approaches, which has increased the number of legacy systems. 

There has not been enough investment in digital transformation to meet the government's ambitions. Government committed £4.7 billion to deliver the Portfolio between 2016 and 2021. NHS England & NHS Improvement (NHSE&I) acknowledged that this funding was not enough to deliver everything, but felt it was enough to make a good start and thereby make the case for additional funding. At a local level, NHS trusts’ and foundation trusts’ (trusts’) expenditure on IT varies widely and collectively less than 2% of their expenditure is on technology, compared with a recommended 5%.

Current digital transformation plans are based on very limited cost data, and it is uncertain that planned funding will be sufficient. NHSE&I estimates that up to £8.1 billion will be needed between 2019-20 and 2023-24: £5.1 billion from national bodies (2019-20 to 2023-24) and £3 billion from trusts (2019-20 to 2029-30, with the majority in the first five years). However, its 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 £3 billion.

Arrangements for managing digital transformation at a national level remain confused, despite attempts to clarify them, and national oversight of local bodies is still being developed. The Department of Health and Social Care (the Department) set up NHSX in July 2019 to lead digital transformation, but governance arrangements have still not been finalised and NHSX does not have a statutory basis. Digital transformation is essential to the NHS’s Long-Term Plan to improve services and roll out digitally-enabled care, but there is no plan setting out how this will be achieved in clear detail. NHSX intends to publish a comprehensive technology plan for health and care in autumn 2020.

Trusts’ digital maturity has improved, although significant challenges remain. In 2017, 83% of trusts assessed their ability to plan and use digital services as high, compared with 65% in 2016. However, digital capability (the use of technology to deliver care) remains a major challenge. Only 54% of trusts reported that staff can rely on digital records for information they need when they need it.

There are several technical challenges for NHSX to resolve, particularly in terms of enabling digital information to be shared seamlessly across the NHS so that users understand it in the same way. There has been some progress towards ‘interoperability’ of data, but NHSX does not have a timeframe for achieving it and plans are under-developed. There could also be a tension between achieving interoperability and the aim to increase the number of technology suppliers to the NHS. NHSX and NHS Digital intend to ensure all suppliers meet interoperability standards, but increasing suppliers will require more integration of systems. 

To meet their aims, the Department and its arms-length bodies should resolve the governance and accountability issues and major technical challenges that have hampered progress in improving digital services in the NHS. The NAO recommends that these organisations need to have a better understanding of the funding required to meet their ambitions. National governance arrangements should be simplified and strengthened, and digital maturity assessments of local organisations should be used to gather important information.

Gareth Davies, the head of the NAO, said today:

“The track record for digital transformation in the NHS has been poor, with key targets such as a ‘paperless’ NHS by 2018 not being achieved. Local NHS organisations in particular face significant challenges, including outdated IT systems and competing demands on their resources. 

“The delivery of healthcare will continue to change, and it needs to be supported by modern, integrated and up-to-date information systems.  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. If they don’t, they are unlikely to meet their ambitions for digital transformation and achieve value for taxpayers.”

Key facts