The UK government is preparing to encourage the National Health Service and the Ministry of Defence to prioritise domestic technology suppliers, as ministers seek to stimulate economic growth and strengthen resilience during escalating tensions linked to the Iran crisis. The proposal, outlined by Spencer Livermore, forms part of a broader economic strategy led by Chancellor Rachel Reeves. The approach places significant emphasis on artificial intelligence and innovation as key drivers of productivity and long-term growth. Rising oil prices and concerns over inflation, triggered by instability in the Middle East, have intensified pressure on the UK government to identify domestic sources of economic resilience. In this context, public sector procurement, particularly within healthcare and defence which is being positioned as a lever to support homegrown technology firms.
AI at the centre of economic and health strategy
Central to the government’s plans is a renewed focus on artificial intelligence adoption across public services. Ministers have signalled an ambition for the UK to become one of the fastest adopters of AI globally, with healthcare identified as a critical use case. Within the NHS, AI technologies are increasingly used to support diagnostics, clinical decision-making, patient flow management and administrative automation. Encouraging procurement from UK-based AI companies could accelerate deployment while also supporting the domestic innovation ecosystem. Livermore emphasised that the government wants to present an “optimistic case” for AI, despite growing concerns about its impact on jobs and workforce displacement.
For health technology leaders, the shift could mark a significant change in procurement strategy. Historically, NHS technology contracts have often been awarded to large multinational suppliers, including US-based firms. A pivot towards British providers may reshape the competitive landscape, particularly for smaller and medium-sized enterprises specialising in AI and digital health.
Reforming procurement to accelerate innovation
A key barrier to adopting new technologies in the NHS has been the complexity and pace of procurement processes. To address this, the government plans to establish a rapid innovation procurement taskforce, designed to bypass traditional bureaucratic pathways and enable faster adoption of emerging technologies. The initiative will initially be piloted in both healthcare and defence, reflecting the strategic importance of these sectors. By streamlining procurement, ministers hope to ensure that public bodies can act as early adopters of innovative technologies, rather than lagging behind private sector uptake.
This approach also aims to tackle a longstanding issue within the NHS: the difficulty faced by domestic technology firms in securing contracts. Smaller UK companies have often struggled to navigate procurement frameworks or compete with established global vendors. If successful, the taskforce could create new opportunities for British health technology firms to scale their solutions within the NHS, potentially accelerating innovation in areas such as remote monitoring, data analytics and AI-driven diagnostics.
Balancing global partnerships with domestic growth
The proposed shift towards “buying British” comes amid ongoing debate about the NHS’s reliance on international technology suppliers. High-profile contracts with global firms have drawn scrutiny, particularly where they involve sensitive health data or long-term system dependencies. At the same time, ministers are seeking to balance domestic industrial policy with international collaboration. Reeves is expected to outline a broader strategy that includes strengthening economic ties with European partners and investing in regional innovation clusters, such as the Oxford-Cambridge corridor. For the health technology sector, this dual approach reflects the complexity of modern digital ecosystems. While supporting domestic firms can drive economic growth and resilience, many cutting-edge technologies, particularly in AI which are developed through global collaboration.
Implications for NHS digital transformation
The policy shift could have far-reaching implications for the NHS’s digital transformation agenda. Increased use of British technology providers may enhance alignment with national priorities, improve data governance and support the development of sovereign digital capabilities. However, experts caution that procurement reform alone will not guarantee successful technology adoption. Effective implementation will depend on workforce readiness, interoperability between systems and sustained investment in digital infrastructure.
The Iran-related geopolitical context adds urgency to these considerations. As global supply chains become more volatile, ensuring that critical public services such as healthcare are supported by resilient, locally anchored technology ecosystems is becoming a strategic priority. Ultimately, the government’s push to align NHS procurement with industrial policy signals a more interventionist approach to technology adoption. Whether this delivers both economic growth and improved health outcomes will depend on how effectively innovation, regulation and system capacity are brought together in the years ahead.
