NHS leaders highlighted the funding constraints that hinder digital progress and innovation at the recent ‘Analogue to Digital: Delivering the NHS 10 Year Plan’ conference in Newcastle-upon-Tyne.

The discussion drew on the findings of a new Global Government Forum study titled A Fresh Mandate for Digital Leadership in the NHS and based on interviews with trust chief digital and information officers.

A central theme was the rigid split between capital and revenue funding and the challenges this presents.

“We live off these capital one-off investments that last us for a number of years, and it makes the ability or the agility to be able to change quickly impossible when you are just living almost hand to mouth on capital handouts every year,” said David Elliott, chief digital officer at the Great North Healthcare Alliance, during the panel discussion. He noted that this limits the ability to adopt new subscription-based software or cloud infrastructure.

Sir Jim Mackey, chief executive of NHS England, said this had been a “really big” issue in the recent Spending Review.

“Most of our capital investment is actually secured in the capital element of the Spending Review,” he said. “In the old days, we could move capital and revenue between each other – we can’t now under fiscal rules.”

Mackey said that in the negotiations, NHS England had pushed for a new classification for digital spending in government accounting – DDEL, to go alongside CDEL and RDEL (capital and revenue departmental expenditure limits).

Although “we got close to that”, the measure didn’t ultimately materialise.

Mackey acknowledged the perception that “capital is technically more likely to be a good thing, more productivity-enhancing” but warned that the NHS was “really boxed in” by the current approach.

He added that to date there is limited evidence of significant revenue benefits from technology investment, and demonstrating improved productivity could help to create greater financial flexibility in the future.

Ming Tang, chief data and analytics officer and interim chief digital and information officer, NHS England, said steps were being taken to address some of the structural challenges.

“We are working with GDS [the Government Digital Service] to look at buying cloud on a multi-year basis…because otherwise we’re all going to be held back,” she said.

Tang added that there would be changes to national funding programmes and the way business cases are put forward in the Spending Review.

“We want to change the mix of technology versus deployment and make it more 50/50” to “free up some money to help adoption”, she said, warning that if benefits are not realised, investment “just becomes a sink”.

She cited evidence of success when people take the money provided and connect it with the rest of the organisation – for example, chief digital and information officers who have secured board support through a strong business case and tied investments to a cost improvement programme.

Read more: We must drive the value out of digital investments, NHS chief Jim Mackey tells Newcastle conference  

Unlocking AI’s potential

AI was another key topic for the panel, which was moderated by Andrew Besford, lead author of A Fresh Mandate for Digital Leadership in the NHS and non-executive director at Northumbria Healthcare NHS Foundation Trust and Gateshead Health NHS Foundation Trust.

Mackey said that often there can be “an attraction to single things that are going to fix all our problems, and AI feels like one of them” but “it’s more complicated than that”.

He said the NHS must “socialise” AI more broadly across clinical and operational settings: “We’ve got to find some common ground. It’s not going to change everyone’s life tomorrow, nor is it so dangerous that we shouldn’t touch it.”

“We just have to find ways of bringing it to life” to show the benefits, he added.

Michael Brodie, chief executive of the NHS Business Services Authority (NHSBSA), described AI as “just another tool, albeit a pretty impressive one”. His organisation is looking at areas such as using AI to improve personal effectiveness, support coding, and automate contact-centre services. He said he was also “really excited” about the potential to integrate AI into building new services.

NHSBSA has announced plans for an enhanced workforce management solution to succeed the Electronic Staff Record. He said he would like the system to support simpler booking of annual leave and career planning, for example.

“We don’t want a faster horse – we want a motor car,” Brodie said, noting that the goal is systems that are intuitive and that make NHS staff lives easier.

He added that potential blockers are data quality and the clarity of business rules that AI needs, and these are areas of focus now for NHSBSA.

Bringing the discussion back to patients, Dr Birju Bartoli, chief executive at Northumbria Healthcare NHS Foundation Trust, said that many patients already expect that NHS organisations are using technology such as AI but stressed that public confidence will hinge on openness and communication.

“Being upfront about why we’re using [AI] and what the checks and balances are – that’s what will build confidence,” she said. “Ultimately, patients want to be seen quickly, have a good outcome and an honest conversation.” She said that as long as AI helps improve the patient experience, it can play a role.

Asked about the risk of AI adoption across the NHS being patchy, Tang said the priority from the centre is to set guardrails, rather than prescribe a single national approach. “There’s some guidance and ‘how-tos’ that we’ll do to equalise that footprint, but you almost need a bit of that variation because people learn at different paces,” she said.

Tang highlighted the example of ambient voice technology, which some clinicians have “just grabbed” as an evolution of dictation tools. But she stressed the need to connect such innovation to measurable productivity gains.

She said the NHS could qualify some tested AI tools, providing trusts with guidance for experimentation. Coordinating and sharing lessons from these experiments would also be key.

“Trying to do one-size-fits-all is where we’ve often failed from the centre,” she added.

Download the research study: A Fresh Mandate for Digital Leadership in the NHS

Building digital capability

The need to build the right digital capability was also a major theme of the research study and panel discussion.

Elliott highlighted the importance of the board. “You need general digital support on the board,” he said, stressing the role of digital non-executive directors, who can support the rest of the team to understand digital goals and opportunities, agree the strategy, and be bold on investment.

He also emphasised the roles needed beyond core digital and data skills, such as business analysts and change managers who can work alongside clinicians to drive digital adoption and redesign processes and systems.

At a national level, Tang said NHS England is using findings from the Digital Maturity Assessment survey to design communities of practice and is working closely with the Government Digital Service to ensure a degree of consistency between the NHS and government. “We’ve built a lot for the data and analytics profession; we now need to catch up on digital,” she said, adding that this would be done in partnership with regions to learn from what’s already working well locally.

Brodie outlined the need to create “the right conditions” for digital innovation to thrive, including a focus on both technology and people. This meant the NHSBSA being clear that it wanted to be a technology-enabled organisation, establishing a merged Digital, Data and Technology directorate to reduce duplication, and setting an ambition “not just to be a great place to work, but the best place anyone has ever worked”.

The organisation ranked 30th in the most recent Social Mobility Employer Index, climbing 104 places since the previous year. Brodie said that around 36% of NHSBSA’s digital workforce and 30% of its digital leadership are women – figures that exceed industry averages.

“We still have further to go but we’re really putting a focus on that,” he said.

Event: As part of the Innovation 2026 event programme, Global Government Forum is bringing together leaders from across the NHS and wider public sector to discuss how to achieve the 10 Year Health Plan. Find out more



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