Financial Directions - Need to Know

The government’s latest financial directions to NHS England offer a sobering but important signal to digital health companies looking to partner with the NHS.

Revenue growth is slowing — NHS England’s total revenue budget will be £205.1 billion in 2025–26, up just 4.9% from the previous year. With rising demand and flat real-terms growth, expect tighter scrutiny on every pound spent.

Capital is largely in ICB hands — Of the £4.86 billion capital allocation, £4.45 billion will flow through Integrated Care Boards (ICBs). This means that if you offer digital infrastructure, diagnostic tools, or hardware, ICB engagement is still important.

No ringfenced budget for tech/digital — Despite pressure to deliver digital transformation, the directions make no explicit provision for tech investment. Even the NHS Technology and Digital Programme is only mentioned in passing — with capital trickling through from DHSC during the year. The phrasing suggests it’s funded opportunistically, not strategically. And possibly at risk of cuts or reprioritisation during the year. Translation: if your offer isn’t clearly solving an operational problem, it’s at risk of being deprioritised.

What this means for you:

• There is no guarantee of sustained or visible funding for centrally-led digital innovation programmes in 2025–26.

• If your offer relies on alignment with the NHS Technology and Digital Programme (e.g., federated data platforms, shared care records, or infrastructure upgrades), you’ll need to:

  • Validate whether that funding has actually landed with your target NHS organisation

  • Be ready to show how your solution supports core operational or clinical outcomes

  • Consider alternative funding routes — like ICB capital, private partnerships, or innovation grants

Innovative companies will need to:

Align with core system priorities — think flow, elective recovery, productivity, workforce support

Get in early with ICBs to understand their capital priorities for 2025–26. ✅ Position your solution as mission-critical, not “nice to have.”

Be prepared to help customers build a business case that withstands scrutiny.

At the Digital Healthcare Council, we help our members navigate this complex financial environment — connecting them with the people and insights that make innovation possible, even when budgets are tight.