This week the Chancellor Philip Hammond unveiled this year’s hotly-anticipated Autumn budget statement.
Digital and technology were key themes in his statement to Parliament, which looked beyond Brexit and borrowing to Britain’s leading role in a global “technological revolution”.
Meanwhile, commitments to allocate more funding to the NHS will be welcomed, but will not satisfy the demands of an organisation facing exceptional pressure.
Implications for companies working in the digital health space
Many of the measures addressing digital technology and SME funding served to underline the importance of economic growth and international competitiveness, against a backdrop of Brexit uncertainty and declining forecasts from the Office for Budget Responsibility (OBR).
Commitments to meet future digital challenges clearly demonstrate the UK’s drive to become a digital leader in a competitive international market. These include: workforce digital skills, taxation in the digital economy, investment in AI and 5G infrastructure, a fund for Government technology, and additional funding to expand the reach of Tech City UK.
Likewise, in line with the Life Sciences Industrial Strategy, there will be more support for research and development – but an increase in R&D expenditure credit (RDEC) will mainly benefit larger companies.
Nevertheless, there was plenty of good news for smaller companies looking to attract greater investment and assure their growth:
- The Treasury’s Patient Capital Review has led to an action plan to release £20 billion of new investment in scale-ups
- The tax relief limit of the Enterprise Investment Scheme will be doubled for knowledge intensive companies
- The UK will step in to replace European Investment Fund lending if necessary
- The VAT threshold for SMEs will remain at £85,000 for two years, protecting start-ups from VAT until they have achieved significant growth
- Uprating of business rates will be aligned to the Consumer Price Index (CPI) rather than Retail Price Index (RPI), representing £2.3 billion value to SMEs over five years
Of course, most of these announcements are not completely new, and are simply building on or maintaining existing arrangements.
So far, so digital.
The fact remains that for digital health SMEs looking to gain traction in the NHS, funding and business strategy is only part of the equation. NHS readiness to adopt digital solutions is the other part, which can often make or break a company’s success.
The announcement of an additional £3.5 billion capital and £2.8 billion resource funding for the NHS, though sorely needed, is unlikely to enable the NHS to move from short-term prioritisation to long-term digital transformation.
On the other hand, the promise of a new Regulator’s Pioneers Fund could set the direction for more digital-friendly regulation across a range of different sectors, including in public sector healthcare. This would be welcomed by SMEs engaging with the NHS, where they often face a snail’s-pace journey to regulatory approval and a range of digital disincentives hidden among payment mechanisms.
In the same way, the recent news of London’s health devolution deal should also give grounds for cautious optimism that we might expect digital health regulation to be more responsive to both NHS system priorities and SME needs in the future.
Sarah joins DigitalHealth.London’s Accelerator team on secondment from the Civil Service, where she has worked in digitally-focused roles in the Department of Health and the Department of Education. Her particular interests lie in how technology can be used to address public health and health inequalities.