In July 2024, the Secretary of State for Health and Social Care commissioned Lord Darzi, a surgeon and former health minister, to conduct a comprehensive investigation into the state of the NHS in England.
The report concluded that the health service is in a “critical condition”, with the NHS facing “serious trouble” in several core areas of performance – judgements that come hot on the heels of the government developing its ten-year health plan, due to be published in Spring 2025.
One of the recurring themes to emerge from Darzi’s report was the untapped potential of technology and technological innovation within the NHS, calling for a “tilt towards technology” if the health service, first established in 1948, is to keep pace in the modern world. With Darzi characterising the NHS as being “in the foothills of digital transformation”, the report has placed a spotlight on the need for digital change and a fundamental shift towards technology.
A missed opportunity for digital transformation in the NHS
While the NHS must be able to pay for day-to-day expenses such as staff wages, medicines and equipment, it is substantial capital investment that is needed for a more efficient, productive service, with this investment enabling the adoption of digital technology and modern ways of working.
It is worrying, then, that NHS funding has only increased by just over 1% in real terms each year which, once adjusted for population increase, has left funding essentially flatlined. This, argues Darzi, has left the health service “starved of capital”, directly contributing to the organisation’s habit of only planning a single year in advance and destroying any possibility of embarking upon long-term digital transformation projects.
The resulting lack of capital spending on estate and digital technology has hindered productivity and more efficient operating models. As such, the NHS finds itself trapped in a vicious cycle of drawing down money to stave off current operational pressures at the expense of investment into more substantial digital transformation services. It should surprise no one, therefore, that Lord Darzi singled out the last decade in his report as “a missed opportunity to prepare the NHS for the future”.
Financial transparency in the NHS
Lord Darzi’s report recognises the need for increased transparency across many areas of the NHS, including spending. The lack of robust financial control across the health service is a major challenge, but one which, if overcome, would lead to “insights that allow action”.
The NHS must now look to modern solutions to address this, such as integrated Financial Planning and Analysis [FP&A] platforms that enable NHS leaders, clinicians and managers to access real-time financial insights and dashboards. The ability to track budgets, spending patterns and recourse allocation in this way empowers the kind of informed decision-making called for in the report, ensuring funds are deployed where they are needed most of all.
With the NHS struggling to “fully realise the benefits of information technology” and datasets “largely untapped” in relation to service planning, the greater level of transparency offered by technologies such as FP&A will become key drivers in the ability of the NHS to meet the financial sustainability goals set out in the investigation’s recommendations.
A seamless health service
The NHS is one of the world’s largest employers, with 1.5 million people spread between its various services. Darzi’s report addresses the issues of building an NHS that works seamlessly across its many hospitals, primacy care services and community services, citing that “many of the productivity problems in the NHS are caused by the interaction between different parts of the system”. Employment numbers are not the focus here, with the report making clear that “it is implausible to believe that simply adding more resources will address performance” and characterising low levels of productivity as “a system problem that will require a systematic solution”.
The low levels of digital maturity across the NHS, paired with the slow uptake of technology and financial systems that stymie investment into increased digital transformation, have left the NHS with systems that silo various areas of the service. This, in Darzi’s words, “add[s] to the workload of clinicians rather than releasing more time to care by simplifying the inevitable administrative tasks that arise”.
Solutions like sophisticated, integrated ERP systems are needed now more than ever, supporting shared ledgers and resource sharing across NHS Trusts and services to not only reduce the administrative burden on managers and clinicians but to enable smooth financial operations across the healthcare network.
Modernising procurement
The outdated procurement processes and fragmented supplier management systems within the NHS have, the report reveals, led to inefficiencies and delays in adopting essential medical technologies and other vital solutions. In the investigation’s recommendations, Darzi builds on a vision of a digitally enabled, tech-driven NHS – but this vision requires extensive investment into the digital transformation of the health service.
Advanced financial ERP systems, for example, have the potential to automate procurement workflows, ensuring vendor compliance and streamlining the onerous task of supply chain management which will in turn empower the NHS to procure vital equipment and technology more efficiently. Similarly, though many automation technologies are in regular use within the private sector, the report comments that these are “rarely found” in the NHS. Ultimately, though, it will be solutions like automation and real-time tracking that will reduce the overwhelming bottlenecks that currently impede critical purchases, from medical devices to AI-powered diagnostic tools, improving patient outcomes and employee satisfaction through operational efficiency.
Vital signs remain strong
Though the report details many of the current pressures facing the NHS, Lord Darzi writes that its “vital signs remain strong.” What is needed, he argues, are bold innovative solutions, and the embrace of a long-term commitment towards investing in technology and transformation.
The complexity of the NHS calls for a truly holistic approach to digital transformation that properly aligns with and encompasses its people, processes and technology, and it is this that will ensure the NHS – our NHS – is equipped to meet the demands of the future while continuing to provide world-class healthcare to millions of people.
Emma O’Brien is the Founder of Embridge Consulting.
Read more: The UK’s public sector badly needs a software update. Here’s how to make it happen.
