Spending on IT by NHS Trusts is up annually by seven per cent, according to exclusive research carried out by CRN, which delves into a range of IT issues among the nation's public healthcare Trusts.
CRN sent Freedom of Information (FoI) requests in December to all 161 NHS Trusts in England, and of those, 102 replied. CRN asked the trusts about their annual spending for the financial years ending in March 2016 and March 2015, and asked for information regarding their investments in cloud services. On top of this, information was gleaned relating to the Trusts' key IT suppliers, and about the operating systems on which their PC estates run.
Of the 102 Trusts which responded to our FoI requests, a total of £448.13m was spent by Trusts on IT in FY15/16, a figure which rose 7.4 per cent on the year before. Although the jump seems high - especially against a backdrop of NHS spending cuts - some Trusts completed large one-off upgrades or signed multi-year outsourcing deals during the period, skewing the figures upwards. (Further details on our methodology can be found below.)
The public sector across the board has faced harsh spending conditions in recent years, and the NHS is no exception, with the British Medical Association (BMA) describing the health service as being "at breaking point". The body claims that by the 2020/21 financial year, there will be a £30bn funding mismatch between resources in the NHS and patient needs in England alone. Further, it claims NHS Trusts are facing a £2.45bn deficit.
With this in mind, the way Trusts spend their precious budget is under even more pressure - and it may seem an unpopular decision to deprive front-line services in the name of improving IT.
But despite this, many NHS IT experts are not surprised by the increase in spending revealed by our FoI request responses. Many claim that IT departments have had to hold off on buying new IT for so long since the coalition's spending review in 2010, that eventually, they have to cough up for new gear.
Mark Hall, public sector director at Redcentric, said that the attitude towards buying IT in the NHS has changed in the last year to 18 months.
"There is a lot of change at the moment," he said. "The NHS is really trying to reorganise itself from top to bottom, make itself more efficient, cut spend and deliver better technology [and] innovate - but I would put this in inverted commas, because that means more than cutting spend.
"We're seeing a rationalisation on technology. By which I mean if you look back about 10 or 15 years, we've seen a nice steady flow of ICT spend in the sector. It has been OK - modest - and just a few spikes. Nothing that is going to rock your world. But fast-forward to that last 12 to 18 months, we've been seeing - I wouldn't say explosive - but a marked increase in NHS Trusts coming to us saying 'we've got this challenge because we have old equipment and we haven't got the right staff, can you help us?'. We've seen a lot of uptake on that. And it's not just in traditional stuff - a bit of software-as-a-service, or application hosting - although it is massively important.
"We're seeing things such as VDI - for example, 1,000 XP machines: to upgrade the hardware there or to do the software licensing, or just to upgrade, it's a massive amount of cost. So we're seeing some large Trusts come to us and say 'how can we virtualise our desktops while maintaining these assets?'. By doing that, they get a better user experience, it builds in disaster recovery, and it helps them take advantage of new applications."
BridgeHead Software has been selling exclusively to the healthcare space for the last eight years and focuses on backup and archiving software. Its vice president for UKI Tony Tomkys said he is not surprised by suggestions that IT spending is on the up in the NHS.
"The reason it has to continued to grow at that rate or more is that, historically, the level of spend on IT in healthcare generally and in the NHS is much lower than in other industries," he said. "If you were to compare the amount of spend versus budget, or versus revenue, against other vertical markets - finance or telecoms - you will see the amount spent in any public sector environment is significantly lower than in the private sector. That's not a good thing and obviously with initiatives for Trusts to go paperless and all these digital transformation strategies, it will have to grow a lot more than seven per cent in order to achieve any of those objectives."
On 16 December 2016, CRN sent FOI requests to 161 NHS Trusts in the UK. Public bodies aim to respond to such requests within 20 working days, but CRN allowed longer than this - until the end of January - to account for the Christmas break, in the interests of gathering as much data as possible. Within that timeframe 102 of the Trusts replied and provided responses to some or all of the questions we asked.
The annual spending figure was up 7.4 per cent annually in FY16, which may appear high, especially against a backdrop of NHS cuts. Some of the figures provided were skewed because Trusts completed large, one-off deals in FY16, which pushed up the annual increase. Further, other Trusts included spending on specific, one-off, high-end medical equipment. These figures have not been excluded to form adjusted figures, because while some Trusts disclosed why their spending is up significantly year on year, others did not, meaning excluding those that did would skew the figures further.
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