The Spring Budget, announced yesterday (7 March 2024) contained a series of policies and funding announcements for the Healthcare and Life Sciences sector. Central to this was new ringfenced funding for Health Tech.

Key policy announcements for Healthcare and Life Sciences included:

  • A headline figure of nearly £6bn of additional funding for the NHS, £2.5bn of which has been allocated to the NHS in England’s operational funding for 2024/25.
  • A £4.2bn Public Sector Productivity Plan, £3.4bn of which will be ringfenced for measures aimed at facilitating the digital transformation of the NHS.
  • A £45m boost to medical research charities to develop new medicines for diseases including dementia, cancer and epilepsy.

The Chancellor also announced AstraZeneca’s plans to invest £650m in the UK, including £450m into researching, developing and manufacturing new vaccines at its plant in Speke, Liverpool.

Health Tech funding to drive digital transformation

The £3.4bn to invest in the digital transformation of the NHS is aimed at improvements in artificial intelligence (AI) and diagnostic technologies such as MRI and CT scanners, enhancements to the NHS app, the launch of a new NHS staff app and the introduction of nationwide electronic patient records – all initiatives to help improve the speed and quality with which healthcare professionals can perform their roles, whether that is the analysis of scans, or to improve communications or remove and reduce time-consuming administration. 

It is said that these measures will contribute to making the NHS “the largest digitally integrated healthcare system in the world”, along with enabling the NHS to commit to an annual 1.9% increase in productivity whilst bringing £35bn of savings.

Industry reaction

While some analysts have expressed that operational funding may serve primarily to plug the gaps created by past pay agreements rather than constituting new investment, others welcome the boost as a “temporary respite”. 

NHS Providers' chief executive, Sir Julian Hartley, acknowledged the temporary relief offered by the £2.5 billion boost but underscores the necessity of greater long-term investment for effective future planning. 

Meanwhile, the NHS Confederation emphasised the importance of addressing the funding gap for NHS estates, as well as highlighting more widely the need for greater and more comprehensive capital funding to realise productivity gains.

What’s next?

As stakeholders await further details on the implementation of the Public Sector Productivity Plan, the recognition of Health Tech's potential to drive productivity reflects the Government’s longstanding acknowledgement that Health Tech and Life Sciences can be a key growth sector for the UK, with similar support being announced in the previous Autumn Statement.

Implementing the huge programme of regulatory reform in a way which will allow potential funding to drive innovation will be key.

If you would like to discuss how these changes might impact your business, please contact our Healthcare team.