The government has announced a vision for a more technology- and data-driven NHS. This has the possibility to transform patient services and improve patient care. Yet there is uncertainty around how this vision will be funded, particularly at a time when NHS trusts have had the value of their equipment fall by 10% since 2010/11.

Although the government has pledged an extra £20.5bn in funding for the NHS by 2023/24, this does not include any funding for the capital budget. The 2019 Spending Review needs to make long-term capital-funding commitments.

The capital budget cannot continue to be used to relieve short-term pressures on front-line services. Capital-to-revenue transfers must stop, as they will only continue the current short-termism with regards to capital spending. This is only pushing problems into the future, and has resulted in a growing maintenance backlog and multiple years of negative growth in capital funding. It has also made it difficult to make long-term capital decisions, as there is no certainty about funding.

Capital must be a key component in transforming NHS services. The 2019 Spending Review should include a long-term commitment to capital funding that reverses the recent trends of declining capital spending and a rising maintenance backlog. If capital spending was increased to be in line with the OECD average – as it was between 2008 and 2010 – this would require the DHSC capital budget to be £9.5bn in 2019/20. This would be a £3.5bn increase on top of the current capital budget in 2018/19, rising to £4.1bn by 2023/24.


  1. Department of Health and Social Care. The Future of Healthcare: Our Vision for Digital, Data and Technology in Health and Care. Department of Health and Social Care; 2018 (
  2. Dayan M, Ward D, Gardner T et al. How good is the NHS? Health Foundation; 2018 (
  3. Willeme P, Dumont M. Machines that go ‘ping’: Medical technology and health expenditures in OECD countries. Health Economics. 2015; 24: 1027–41.
  4. Topol E. The Topol Review. Preparing the Healthcare Workforce to Deliver the Digital Future. Health Education England; 2019 (
  5. HM Treasury. Central Government Supply Estimates 2018–19: Supplementary Estimates. TSO (The Stationery Office); 2019 (
  6. Kraindler J, Firth Z, Charlesworth A. False Economy: An Analysis of NHS Funding Pressures. Health Foundation; 2018 (
  7. National Institute of Health Research. Who We Are. National Institute of Health Research; 2018 (
  8. HM Treasury. Central Government Supply Estimates 2018–10. Supplementary Estimates for the Year Ending 31 March 2019. HM Treasury; 2018.
  9. National Audit Office. NHS Financial Sustainability. National Audit Office; 2019 (
  10. Healthcare Financial Management Association. NHS Capital – A System in Distress? Healthcare Financial Management Association; 2018 (
  11. Health Foundation, The King’s Fund, Nuffield Trust. Budget 2018: What it Means for Health and Social Care. Health Foundation, 2018 (
  12. Appleby J, Gershlick B. Keeping up with the Johanssons: How does UK health spending compare internationally? British Medical Journal. 2017; 358: j3568.
  13. Naylor R. NHS Property and Estates. Why the Estate Matters for Patients. Department of Health and Social Care; 2017 (
  14. Organisation for Economic Co-operation and Development. Health at a Glance 2017. Capital Expenditure in the Health Sector. Organisation for Economic Co-operation and Development; 2017.
  15. Richards M, Thorlby R, Fisher R et al. Unfinished Business: An Assessment of the National Approach to Improving Cancer Services in England 1995–2015. Health Foundation; 2018 (
  16. NHS Improvement. Performance of the NHS Provider Sector for the Quarter Ended 30 September 2018. NHS Improvement; 2018 (
  17. NHS Improvement. Consolidated NHS Provider Accounts 2017/18. NHS Improvement; 2018 (
  18. National Audit Office. Investigation into the Management of Health Screening. National Audit Office; 2019 (
  19. Williams I, Allen K, Plahe G. Restricted Capital Spending in the English NHS: A Qualitative Enquiry and Analysis of Implications. Health Services Management Centre (in press).
  20. Dunhill L. Two-thirds of land proceeds go into revenue, despite reinvestment pledge. Health Services Journal; 12 November 2018 (
  21. Office for Budget Responsibility. Economic and Fiscal Outlook: March 2018. Office for Budget Responsibility; 2018.
  22. Williams C, Asi Y, Raffenaud A et al. The effect of information technology on hospital performance. Health Care Management Science. 2016; 19: 338–46.
  23. Macdonnell M, Darzi A. A key to slower health spending growth worldwide will be unlocking innovation to reduce the labor-intensity of care. Health Affairs. 2013; 32: 653–60.
  24. Lin SC, Jha AK, Adler-Milstein J. Electronic Health Records associated with lower hospital mortality after systems have time to mature. Health Affairs. 2013; 37: 1128–35.
  25. Office for National Statistics. Public Service Productivity: Healthcare, England: Financial Year Ending 2017. Office for National Statistics; 2019 (
  26. Castelli A, Street A, Verzulli R et al. Examining variations in hospital productivity in the English NHS. European Journal of Health Economics. 2015; 16: 243–54.
  27. Department of Health and Social Care. Operational Productivity and Performance in English NHS Acute Hospitals: Unwarranted Variations. Department of Health and Social Care; 2016 (
  28. Health Foundation, The King’s Fund. Making Change Possible: A Transformation Fund for the NHS. The King's Fund; 2015 (
  29. Morgan M. Poor hospital design has an impact on staff, patients and healthcare. British Medical Journal. 2018; 360: k288.
  30. Department of Health and Social Care. Modernising the Mental Health Act. Final Report of the Independent Review of the Mental Health Act 1983. Department of Health and Social Care; 2018 (
  31. Mills GRW, Deka L, Price ADF et al. Critical infrastructure risk in NHS England: Predicting the impact of building portfolio age. International Journal of Strategic Property Management. 2015; 19: 159–72.
  32. House of Commons Committee of Public Accounts Sustainability and Transformation in the NHS. Twenty-Ninth Report of Session 2017–19. Committee of Public Accounts; 2018 (
  33. Greenhalgh T, Wherton J, Papoutsi C et al. Beyond adoption: A new framework for theorizing and evaluating nonadoption, abandonment, and challenges to the scale-up, spread, and sustainability of health and care technologies. Journal of Medical Internet Research. 2017; 19: e367.
  34. Maguire D, Evans H, Honeyman M et al. Digital Change in Health and Social Care. The King’s Fund; 2018 (


The authors would like to thank Debbie Patterson and the NHS Improvement economics team for their feedback and insight into this report.