Four out of ten NHS IT staff are expecting their budgets to decrease next year, and a further 36% expect them to be frozen at this year’s level.

The generally gloomy picture was uncovered by E-Health Insider’s recent reader survey, which was completed by 654 EHI readers. Just 25% of respondents thought that their budgets might increase.

Jonathan Edwards, research vice president, healthcare providers, at Gartner responded: “I am not surprised. 2010-11 is the final year before the new funding cycle and we all know that NHS spending will be cut. So it makes sense that chief executives are going to start tightening belts.”

The NHS’ comprehensive spending review settlement with the Treasury runs out at the end of 2010-11, and policy makers have been warning managers to prepare to make big efficiency savings.

However, ministers and senior figures at the Department of Health have been urging them to generate savings through QIPP – the quality, innovation, productivity and prevention agenda – rather than by ‘salami slicing’ budgets. This would imply a sharper focus on IT.

Melissa Frewin, head of healthcare at Intellect told EHI: “IT is all too often seen as an administrative overhead, but achieving the level of savings that the health service needs to make will require radical new ways of doing things.

"IT will have a vital role to play in supporting those changes. A slash and burn approach simply won’t work.”

Brian Derry, chairman of ASSIST, added: “There is no doubt that public expenses will be under pressure next year and even more the year after. IT and information cannot be immune from that. However, trusts will be short-sighted if they cut back too much on informatics.”

The financial situation and the NHS’ likely response forms the background to this year’s E-Health Insider Live ’09, which starts today at The ICC in Birmingham.

The exhibition and event will give NHS IT directors and other decision makers the chance to meet suppliers and discuss how they can use IT to generate efficiencies while maintaining quality, in preparation for the squeeze.

Frances Blunden, senior policy manager at the NHS Confederation, said: “Trusts need to be using existing systems to yield tangible benefits.

“Organisations need to focus their IT efforts around improving data quality, which the recent annual health check showed was a problematic area. Tracking people through the system is also important for a number of reasons [including funding under Payment by Results].” she said.

Edwards also felt that any investment would “most likely be in systems that help with performance management reporting, business process improvement and materials management. “Advanced clinical will be lower priority,” he warned.

EHI’s survey also revealed that most respondents saw increasing workloads (68%) and budget cuts (68%) as the biggest challenges that would face them and their role over the next 12-18 months.

More than half of respondents also said that changes in government policy (58%) and information governance (52%) would be key challenges.

Derry said: “Just like the survey shows, there is going to be a huge pressure on costs, increased workloads, and a possible change in government.

"Trusts should be making the best possible use of systems they already have and not neglecting areas we often take for granted, such as patient administration and clinical coding.”

Cornelia Wels-Maug, senior analyst at Ovum, argued that against this background NHS IT teams should become increasingly important to their organisations.

“Despite all the cuts, managers and chief information officers are gradually getting more freedom so they can negotiate better deals and that could help balance out the cuts,” she said.