Digital transformation in the NHS Contents

2Funding and support to improve the NHS’s digital capabilities

Supporting local organisations to improve their digital capabilities

18.Patient records are fragmented across thousands of local organisations that provide patient care, including 227 NHS trusts and NHS foundation trusts, around 7,000 GP practices and around 18,500 adult social care providers.32 NHSX acknowledged that to deliver its digital strategy, local organisations would need the necessary skills and capacity, as well as guidance from the centre, to be able to make decisions and progress.33 However, specialist skills in digital are in short supply.34 The National Audit Office found that 13% of trusts self-assessed their capability as ‘high’ and 16% of trusts self-assessed it as ‘low’ in 2017.35 The Department noted that some trusts were more digitally mature than others.36

19.The Global Digital Exemplar (GDE) programme, run by NHSX, aims to create a cadre of high-performing trusts which other trusts can follow (in particular partner trusts, known as ’fast followers’). Despite the variation between the digital maturity of trusts, the National Audit Office found that the GDE programme had focused on improving the digital maturity of a small number of higher-performing trusts. In 2016–17, the programme committed to providing £385 million of funding between 26 relatively digitally-mature trusts to enable them to become world leaders (with smaller shares going to the fast followers).37 NHSX told us that it had moved from supporting the most digitally-mature trusts to helping the less-advanced trusts to catch up. It told us that it was also reducing the paperwork required for applications for funding, to make the process more manageable and make it easier for trusts that may not have the skills and capacity required to submit a top-quality business case. It explained that it also planned to increase its spending on training the digital workforce, from £3.5 million in 2019–20 to an estimated £9 million in 2020–21 and expected to increase this further in future. Its initial focus will be on training chief executives, boards and leadership teams, and it will next turn its focus to chief information officers and chief clinical information officers.38

20.In our 2018 report on the WannaCry Cyber-attack on the NHS, we found that the Department and its arm’s-length bodies were unprepared for the relatively unsophisticated WannaCry attack and had a lot of work to do to improve cyber-security for when, and not if, there was another attack.39 We asked how the NHS was ensuring that it had the skills it needed to manage the risks of future cyberattacks, NHS Digital acknowledged that there remained a “significant cyber risk” associated with legacy IT systems, which were especially vulnerable to cyber-attack.40 It admitted that the NHS “desperately need skills” in cyber security. It told us that it was using questionnaires to assess trusts’ exposure to cyber-security risks and was focusing its efforts on trusts at the bottom end of the spectrum. In response to our questions, NHS Digital was not able to confirm that all trusts have a suitable cyber-security plan. NHSX added that it was focusing on building cyber-security capability within NHS Digital and the National Cyber Security Centre, rather than trying to turn every trust into a “cyber-security hothouse”.41

21.NHSE&I expects that trusts will need to contribute £3 billion, under matched- funding arrangements, between 201920 and 2028–29 to meet its current plans for a digital transformation.42 However, in their written evidence to us NHS Providers, the Royal College of Midwives and the NHS Confederation all raised concerns about the ability of trusts to fund digital transformation programmes.43 The Royal College of Midwives told us that in its survey of ‘digital midwives’, a lack of money was the most common answer to its question on why they had not achieved digital transformation within their trust. NHS Providers also told us that that that access to funding was one of the factors driving the variation in digital maturity between trusts. We have reported on the financial and service sustainability of NHS bodies every year since 2011, and have consistently highlighted a range of challenges faced by the NHS, including rising demand, lack of capital investment and tackling trust deficits.44 We asked the Department how it was ensuring that those trusts which had financial difficulties were still able to invest in digital transformation. The Department told us that the funding for digital transformation was not ring-fenced. It expected the £3 billion from trusts to come through its matched-funding arrangements under which the Departments and trusts contribute equivalent funding for local projects. It explained that as part of its strategy to return the provider sector to financial balance, it planned to engage with the most financially-challenged trusts to develop recovery plans.45 However, our reports have illustrated that many trusts have deep-routed structural issues that are difficult to fix. For example, our report on NHS financial management and sustainability found that writing off the loans owed by struggling trusts does not solve the underlying problems facing these organisations.46

The cost and benefits of the digital transformation

22.Of the £8.1 billion estimated to be needed to deliver its digital transformation ambitions, NHSE&I expects that £5.1 billion will be funded by national bodies. This includes £2.2 billion of revenue funding, which covers day-to-day activities, and £2.9 billion of capital funding, which covers investments in new buildings or equipment.47 The National Audit Office found that NHSE&I’s costing estimates for the £8.1 billion were based on very limited cost data, using information from just 14 trusts. We asked whether the Department was confident that the £8.1 billion would be enough to achieve its ambitions, particularly given problems of under-investment in the past. The Department told us that it was confident that the £8.1 billion would be enough to achieve its ambitions and make good progress, but recognised that investment in digital capability would be an “enduring feature” of the NHS. The Department explained that the £2.9 billion of capital funding will be subject to approval at the next spending review, due in autumn 2020. We asked the Department whether the COVID-19 outbreak would put extra financial pressures on the Department’s spending. In response, it told us that that “generally speaking” the Treasury had been meeting additional costs that have resulted from the pandemic and it was not expecting any additional financial pressures as a result.48 In our report on NHS financial management and sustainability we reported that future services would be under increased pressure as a result of COVID-19. For example, NHSE&I recognised that services cannot go back to the way they were delivered before due to the risk of the virus and additional capacity will be required just to treat the same number of patients as before.49

23.The National Audit Office found that NHSX was unclear about the whole-life costs and benefits of the different approaches to digital transformation at a local level.50 For example, NHSX expected trusts to take one of three approaches to replacing their electronic patient records:

NHSX acknowledged that the NHS cannot afford to implement the enterprise-wide system in every trust. A 2019 survey of 186 IT leaders across the sector found slightly more trusts were developing an enterprise-wide approach compared with best of breed (at a ratio of 33:26)

24.We noted that having a clear grasp of the costs and benefits of digital transformation will be essential to ensuring trusts are on board. We therefore asked what NHSX was doing to address this and help trusts see the long-term potential savings from its plans.51 NHSX recognised that engaging with those on the front line would be essential to the success or failure of its initiatives.52 It told us that it intended to complete an initial assessment of the costs and benefits of the different approaches to implementing electronic patient record systems within the next six months.53 However, the NHS also lacks cost and performance information on the true cost of legacy services. The NAO report highlighted that such information is vital for investment decisions on replacement IT systems and for producing a robust business case for such a change.54

32 C&AG’s Report, para 1.4, Figure 2

33 Q37

34 C&AG’s Report, para 17

35 C&AG’s Report, para 8, Figure 4.

36 Q41

37 C&AG’s Report, para 7

38 Qq 73, 81–82

39 House of Commons Committee of Public Accounts, Cyber-attack on the NHS, HC 787, Session 2005–06, 18 April 2018. Available at:

40 Qq 33, C&AG’s Report para 18

41 Qq 33 & qq83–85

42 C&AG’s Report, para 6

43 DGT0011 - NHS Providers submission, para 5; DGT0007 - The Royal College of Midwives submission, para 25; DGT0014 - NHS Confederation submission, para 6

44 House of Commons Committee of Public Accounts, NHS capital expenditure and financial management, HC344, Session 2019–21, 8 July 2020. Available at:

45 Q89

46 Q79; House of Commons Committee of Public Accounts, NHS capital expenditure and financial management, HC344, Session 2019–21, 8 July 2020.

47 C&AG’s Report, para 6

48 Qq 76 -78

49 See footnote 49.

50 C&AG’s Report para 6, 13, 3.5,

51 Qq 86, 88

52 Q 88

53 Q87

54 C&AG’s Report, para 1.3

Published: 6 November 2020