NHS wastes money on overpriced foreign tech, says ex-health secretary
The NHS is overspending on expensive foreign IT systems and should buy British instead, a former health secretary has said.
Steve Barclay said health service bosses could save money, cut waiting lists and improve clinical outcomes by contracting with local suppliers, rather than overseas providers – typically from the US – who charge higher fees.
He told The Telegraph: 'A government that claims to want to drive UK growth needs to stop spending money on overseas companies that are not committed to the NHS, and prioritise British business.
'A government that claims to want to cut wastage needs to ensure value for money for the taxpayer.'
He singled out the health service's vast expenditure on electronic patient records (EPR), which offer digital versions of people's medical history.
A Freedom of Information request has revealed that some NHS trusts are spending up to £4.3m a year on EPR contracts with overseas suppliers. Many hospitals award contracts to US tech giants such as Larry Ellison's Oracle.
The NHS's reliance on overseas tech comes despite alternative offers from UK-based tech companies.
System C, a software company based in Stratford-upon-Avon, last year launched legal action against Mersey and West Lancashire Teaching Hospitals NHS Trust over its decision to award a £65m EPR contract to US-based Altera.
The trust subsequently reversed its decision after System C claimed there had been favouritism during the procurement process.
Nick Wilson, the chief executive of System C, told The Telegraph: 'The Government has stated that of its six missions, growth is the most important – and one of the easiest ways to promote that growth is to spend hard-earned taxpayers money right here in the UK.
'We have an amazing and vibrant health-tech industry, supporting UK job creation, R&D, exports and of course providing hundreds of millions in tax revenues to the Chancellor.
'It is a complete no-brainer to prioritise and actively support British tech which is built with the NHS and UK social care in mind from the ground up – most of the time at a fraction of the cost of overseas competitors.'
Guy's and St Thomas' Foundation Trust (GSTT) and King's College Hospitals Foundation Trust announced a deal worth £450m with US-based company Epic in February 2022 to roll out an EPR software across six hospitals.
Ian Abbs, the GSTT chief executive, described the cost as 'chicken feed' in comparison to the NHS's pool of resources.
'We [the NHS] are running a £150bn industry, and the percentage spent on tech is relatively small,' he told the Health Service Journal, adding: 'I think the headline number looks big, but I actually think it's small.'
However, Mr Barclay, who served as health secretary under Boris Johnson and Rishi Sunak, said the NHS needed to overhaul its procurement to ensure the right technology was being bought at a fair price.
He said: 'Harnessing technology and deploying it swiftly and effectively across the NHS could transform the service, cut waiting lists, and improve clinical outcomes.
'However, we can do this whilst getting more bang for the taxpayer buck. It needs to be the right technology, at the right price, designed with the specific needs of our NHS in mind.'
Mr Barclay's intervention comes shortly after Amanda Pritchard resigned as NHS England's chief executive. He has urged her eventual successor to make 'cost-effective digitisation – at the right price – a top priority'.
James McMurdock, the Reform MP for South Basildon and East Thurrock, has also called for greater transparency over the NHS procurement process.
'We need a deep and transparent discussion around how the NHS functions operationally and what contracts it signs,' he wrote on X, adding: 'The NHS should not be paying £££s for things that can be bought off the shelf for pennies.'
An NHS spokesman said: 'While the NHS prioritises British businesses when appropriate, it is right we offer contracts based on what offers the best value for the taxpayer – in line with Cabinet Office procurement regulations.'
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