Budget 2025: £300m extra for NHS IT and a £1.8bn budget for digital ID cards
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The Autumn Budget contained little by the way of new policies in digital and technology, but handed out some cash to help progress in digitising public services and to support growing tech businesses
The UK government’s Autumn Budget contained no major announcements of significance to the tech sector, but there were a few developments that continue progress on existing digital policies.
Chancellor of the exchequer Rachel Reeves announced £300m of additional capital investment in NHS technology, intended to “boost productivity, support staff and improve patient outcomes, driving the shift from analogue to digital”. The new funding builds on the £10bn allocated for digital spending as part of the 2025 Spending Review.
The cash will be spent on further developing the NHS App to “ensure seamless navigation and communication between primary and secondary care” and to “close the gap in patient access to digital health records”.
The Budget documents stated that the government “will invest £59m in new technology over the next five years to provide taxpayers with real-time digital prompts for VAT filing software from April 2027, and Corporation Tax filing software from April 2028”.
The government will launch an “advance market commitment” worth up to £100m to encourage investment for novel artificial intelligence (AI) inference chips. AI was mentioned 59 times in the Treasury’s official “red book” document, explaining in detail the measures introduced in the Budget.
Growing tech companies will benefit from a package of tax changes to support scaling companies in attracting investment and talent.
The government said it is “significantly increasing” the company eligibility limits for the Enterprise Management Incentives scheme to “allow scaleups to join startups in offering tax-advantaged shares to the talent they need to grow”.
The government is also increasing the Venture Capital Trust and Enterprise Investment Scheme limits “to allow investors to follow-on as companies grow beyond the startup phase”.
The red book highlighted the planned introduction of a national digital ID scheme as an example of how the government is investing in digital public services and supporting infrastructure. However, no new funding was announced – only last week, the minister for digital government and data, Ian Murray, told Parliament that the ID plan will be funded from existing budgets.
However, the Economic and fiscal outlook report produced by the Office for Budget Responsibility (OBR) to support the Budget revealed that the implementation of digital ID cards is provisionally forecast to cost £1.8bn over the next three years, split across £500m in operating spend and £1.3bn in capital expenditure.
“The government has announced its intention to meet the costs of this through existing budgets, however, no specific savings have yet been identified,” said the OBR. No further details were provided on how that cash will be spent.
Labour MP Chi Onwurah, chair of the House of Commons Science, Innovation and Technology Committee, welcomed the additional support for tech startups and scaleups, but said she was disappointed at the lack of information around the proposed digital ID card scheme.
“The OBR estimated the government’s digital ID scheme is forecast to cost £1.8bn over the next three years. This comes only a week after the committee was told by the minister for digital government that it wasn’t yet possible to assess the cost. Why have we been told two different things?” she said.
“At a time of tight public finances, the OBR has also called the scheme ‘unfunded’. Given how important the digital transformation of public services like digital ID are to the government’s agenda, it’s concerning there is a real lack of transparency and clarity over its costs and benefits.”
The Treasury said in a statement: “Despite a decade of damage and historic underinvestment under the previous government, which led to a £16bn downgrade to productivity, the chancellor was clear she was determined to defy the forecasts and break Britain out of its cycle of decline through stability, investment and reform.”
