Health innovators in the UK have reacted to the recently installed Labour government’s debut budget plan; delivered on Wednesday and including a £40bn increase in taxes.
Health-relevant highlights include a £22.6bn increase in the national day to-day health budget, described by Chancellor Rachel Reeves as “the largest real-terms growth in day-to-day NHS spending outside of Covid since 2010”.
Ms Reeves also stated that: “In the spring, we will publish a 10-year plan for the NHS to deliver a shift from hospital to community, from analogue to digital, and from sickness to prevention.”
In terms of research and development, an influencing factor could be the £100m increase in universities’ wages bill, as quoted by the Times Higher Education.
This comes from a 1.2 per cent increase to 15 per cent in the National Insurance payments that employers contribute for each employee. The salary threshold for these payments was also reduced from £9,100 to £5,000 per year.
This, say some business groups, may steer entrepreneurial and startup activity away from growth and job creation; including in the health tech sector.
David Stockdale, CEO of the British Healthcare Trades Association (BHTA) says: “While we fully welcome additional funding for the NHS, we are deeply concerned about the impact of rising costs on the private sector.
“Many of our members are small and medium enterprises, tied to fixed-price contracts with NHS suppliers, and rising business costs could make them completely unsustainable.
“Taking on increased National Insurance and the Minimum Wage will be particularly costly without support. In fact, we are already hearing that without support this could ‘decimate’ vital sectors like community equipment.
“Tax increases and other escalating business expenses threaten to offset any additional investment being made by the Government.
“The hundreds of SME’s that we represent will bear the brunt if this budget despite the fact that we supply the NHS and local authorities with the essential tech and products necessary to deliver timely, effective care.
“We stand ready and willing to work with the Government to ensure that this investment is not eroded by increased tax burdens on businesses.”
Jason Zemmel, healthcare private equity lawyer at international law firm McDermott Will & Emery, says: “For healthcare the substantial investment in the NHS (and for that matter in education) sends a clear message that investment in healthcare and education is a priority for this Government and should result in healthcare as an asset class continuing to be attractive for private equity investors.”
Meanwhile, Mark Elliott, president at the Chartered Institute of Environmental Health (CIEH) has called for clarity on how multi-year funding commitments for local authority services will apply to environmental health.
He says: “We welcome the Prime Minister’s recognition of the need for stable, multi-year funding for local services, as well as increased grant funding for local authorities to deliver essential services, which represents a transformative opportunity to support the Government’s goal of alleviating pressures on the NHS.
“Environmental health professionals play a vital preventive role, from safeguarding housing conditions to ensuring food and air quality. However, years of underfunding have left local authority EH teams stretched, often relying on costly agency staff to fill critical roles.
“Stable and sustained funding would empower these essential services to reduce preventable illnesses, ease the burden on the NHS, and foster healthier communities.
“An investment in environmental health is an investment in the nation’s wellbeing, and CIEH stands ready to work with the Government to help realise this vision.”
Real World Health’s Scott Fletcher suggests data tools as a key spending area within the government’s NHS budgeting.
He says: “The NHS is getting used to electronic health records (EHRs) and more and more systems are being adopted that make it easier to record information about healthcare interactions with greater accuracy.
“Now we have this information, it’s time to start using it. We are sitting on a goldmine of data that can be interrogated to identify trends and anomalies, to reveal insights into disease pathologies, to case find, to flag health inequalities, to monitor interventions, to track adverse events, the list goes on. We can use this information to tweak and redefine our processes and pathways to optimise the patient experience and improve outcomes of care.
“But to do this to the best effect we need to invest in data tools capable of analysing information from a wide range of organisations that work towards our better health including local authorities, schools, primary and secondary care. We need tools that can harmonise and crunch all that data.
“This will show us the levers to pull and where the system needs adjusting to optimise and tune up the NHS so it becomes a more efficient, higher functioning operation.”
He also adds that: “Typically tech investment has fallen under capital spending, a major focus for the NHS that also includes building infrastructure, purchasing equipment, and maintaining physical assets.
“However, in the new era of cloud computing and digital services, we need to shift this thinking and consider technology as an operational investment. Cloud computing allows NHS organisations to reduce the need for expensive on-premise servers and IT infrastructure, enabling them to access advanced computing power, storage, and applications as a service, often with lower upfront costs and far more agility to keep up with new developments.
“This shift enables the NHS to focus more on service delivery, data accessibility, and innovation in patient care rather than on heavy capital investments in physical assets, which can quickly become obsolete.
“Consequently, capital spending is becoming less central to NHS modernisation efforts compared to investing in adaptable, cloud-based solutions that can be scaled in response to changing needs.”
Darren Rushworth, president of NICE International, argues that AI-driven solutions offer immediate benefits by streamlining operations, including personalised communications and administrative tasks, allowing professionals to focus on what truly matters.
He says: “It is critical to recognise that AI has the power to revolutionise public sector efficiency, empowering critical services like the NHS to deliver exceptional care in-person and digitally.
“In line with the government’s commitment to enhancing service delivery and driving cost-saving, fully embracing automation can help public sector organisations streamline operational workflows, remove burdensome administrative tasks, and achieve significant efficiency savings quickly.
“This frees up those responsible for offering care to focus on what truly matters – delivering empathic experiences that can change lives. It also supports public sector organisations to communicate with citizens in their preferred digital channels and adopt innovative AI agents, moving them into a new era of service delivery.”
Ángel Alberich-Bayarri, CEO of Quibim, an international medtech company with a presence in the UK, says: “The new government’s focus on modernising the NHS to cut waiting lists, and therefore save lives, is right on target.
“Cutting edge technologies, such as AI and data management tools, can enable more timely interventions and reduce the overall human and financial burden within the healthcare system. We hope that a significant portion of the £22.6bn investment will consider how technology can help the NHS achieve these goals.
“It is critical for the private sector to be involved in this responsibly. Many entrepreneurs across Europe and the world are tirelessly working to address these issues, yet they face numerous barriers.
“Medicine at its best transcends borders, and we hope the UK government will lower trade barriers to allow for critical innovation to be shared across countries. Thousands of entrepreneurs worldwide are eager to help reduce wait times and improve health outcomes, and with their help more money can be saved to help the UK return to more sustainable state finances.”
Reflecting on the prospect of greater support for life sciences innovation in the North of England, Hannah Davies, chief executive of the Northern Health Science Alliance, says: “We were pleased to see the Chancellor prioritise innovation and funding for the life sciences sector, recognising it as central to the government’s industrial strategy for driving nationwide economic growth. This emphasis on supporting life sciences shows the vital role of the sector in enhancing health outcomes and bolstering the economy.
“The government’s plan for a new multi-year R&D Missions Programme, which will allocate at least £25m in 2025-26 to tackle targeted challenges, is an exciting initiative. This programme aligns with our ongoing work to build on the excellence of our northern universities and NHS institutions and to foster growth by attracting private and third-sector investment.
“The £70m commitment for the new Life Sciences Innovative Manufacturing Fund in 2025-2026 is a positive step, along with the promise of long-term investment of up to £520m to strengthen resilience against health emergencies and leverage the UK’s R&D strengths. While this commitment is encouraging, and we look forward to further details, we had hoped to see more place-based funding to address decades of underinvestment in the North and mitigate policies that have limited growth in the region.”
Paul Landau, founder and CEO of cancer-focused health tech firm Careology, says: “Building on the promise of a 10-year plan for the NHS, today’s Budget demonstrates real commitment to improving the quality and the efficiency of the health service. However, the promise of 40,000 additional appointments per week must be reserved for those who need face-to-face care and not used for those who could have received care at home.