NHS England’s second technology fund has been cut by nearly £200 million, with only one-fifth of bidders to receive any money, EHI News has exclusively learned.

Beverley Bryant, NHS England’s director of strategic systems and technology, has confirmed that the final size of the ‘Integrated Digital Care: Technology Fund’ signed off by the Treasury is only £43 million.

The fund was £240 million when it was launched in May 2014, and in August NHS England announced that 226 bids worth £360 million had been made to it.

Bryant said this morning that just 48 successful applications from both trusts and local authorities will be funded from the money that remains, £20 million of which must be spent in the 2014-15 financial year, with £23 million to be spent in 2015-16.

Bryant told EHI News: “We remain committed to helping digitise and integrate patient information across health and care.

“The latest round of funding will support doctors, nurses and care staff to move from paper-based clinical records to integrated digital care records, making information sharing easier and ensuring patients only tell their story once. More funding will follow next year and subsequently."

The official confirmation of the cuts comes as NHS trusts in England are being informed as to whether their tech fund 2 bids have been successful.

Trusts started to get news on Monday. By the end of the day, the sketchy picture that had emerged was that priority had been given to funding smaller projects – and that larger projects are receiving no funding.

One NHS IT director told EHI News that he had received a call yesterday from NHS England telling him they would no longer get funding for their project.

“At least we know where we stand now. We were originally told in November that we were ‘not unsuccessful’, though it was made clear this was not the same as successful. Now we have been told we are not ‘not successful’.”   

While disappointed, he said he believed the tech fund 2 bidding process had been well run, but fallen afoul of the Treasury.

“NHS IT was slowly rebuilding its reputation, and this is unfortunately, once again, a real setback. But I do think the tech funds have been a good incentivising model for supporting local projects.”

He expressed frustration at the ‘opportunity cost’ of the tech fund bidding and evaluation process and long hiatus on decisions. “How many hours of senior people's time has been spent on this?

"There must have been 30-40 people working on it at NHS England alone, let alone all the time invested by local organisations.”

However, he also strongly sympathised with the NHS England team led by Tim Kelsey, director of patients and information, and Bryant, who have “put their reputation on the line” and are “bitterly disappointed” at seeing the Treasury remove the money needed.

The key lesson he said is not to rely on the centre for funding strategic IT investment.  “You’ve got to build your ambitions on your own local funding streams. You can’t rely on national funds or you’ll spend your life in disappointment.”

Reader comments on EHI News have reflected this frustration and pointed out the chronic short-termism of cutting IT investment when the NHS is trying to modernise and achieve health secretary Jeremy Hunt’s target of becoming paperless by 2018.

Stephenjj posted: “Putting your money into sophisticated EPRs, digitally joining the economy and automation are among the few ways to truly transfom the NHS.

"Cutting this tech fund is extremely shortsighted and massively frustrating to all of us affected. Beverly has fought a valiant battle for us, but ultimately the DH/Treasury have shot themselves in the foot with this one.”

Asked whether awards were too late to be used, one supplier archly joked: “It doesn’t take long to issue an invoice.”

Another supplier told EHI News that the long delays on awards meant some trusts no longer have the required match funding available.

“In a number of cases, the internal matched funding has been allocated to other projects to get the spend in this year so these projects are at risk."

This story was published on EHI News at 8.30am on Tuesday, 24 February 2015, and updated at 12.30pm to reflect the figures provided by NHS England.