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Creating a new NHS England: NHS England and NHS Digital merged on 1 February 2023. More about the merger.

These accounts have been prepared under a direction issued by the Secretary of State for Health in accordance with the Health and Social Care Act 2012 and the 2019-20 Government Financial Reporting Manual issued by HM Treasury, as interpreted for the health sector by the Department of Health and Social Care Group Accounting Manual.

The accounting policies contained in the Financial Reporting Manual apply the International Financial Reporting Standards (IFRS) as adopted and interpreted for the public sector context.

The accounts comprise a statement of financial position, a statement of comprehensive net expenditure, a statement of cash flows and a statement of changes in taxpayers’ equity, all with related notes.

The accounts have been prepared on a going concern basis. The funding provided for 2020-21 has been largely agreed and, while the short term is expected to be challenging, we have undertaken appropriate measures such as the Org2 restructuring to meet changing requirements.

2019-20 delivery performance

NHS Digital is a non-departmental public body and the majority of our income is grant-in-aid funding from the Department of Health and Social Care.

Most of this – £349 million out of a total of £531 million – is used to run and maintain critical services for the health and care system. Over the past year, we continued to deliver high-quality services with excellent levels of availability. These included:

  • network and infrastructure services used by health and social care organisations
  • digital applications that help members of the public, clinicians and health and social care organisations
  • the collection, analysis and dissemination of data and the provision of a range of data-related services to the system
  • the Cyber Security Operations Centre for the health and care system

Our performance against our service and change programme commitments is regularly reviewed by our Board and at monthly executive management team meetings. This oversight is supported by a performance report, which is produced monthly and includes key performance indicators covering all aspects of service and programme delivery.

These demonstrated consistently high levels of delivery. Specifically:

  • our live services achieved average availably of 99.99%, with ‘fix times’ and response times within target
  • our data services increased the range, completeness and accuracy of collections, our publications continued to meet the highest statistical standards, and our data dissemination processes improved the flow of data while maintaining close oversight of the use and protection of data
  • the Cyber Security Operations Centre met service targets, improved support for the health and care system and ensured robust internal cyber and information security
  • we delivered a portfolio of change programmes including the national release of the NHS App, the introduction of the Data Processing Platform, a new Digital Care Services framework to improve GP IT and important improvements to NHS login, NHS 111 online and the NHS e-Referral Service

Funding and income

The grant-in-aid allocated in the year amounted to £531 million. We also receive income from a range of activities and services including:

  • the development of informatics-related systems
  • the design and management of clinical audits
  • the hosting, management and development of IT systems for the NHS
  • providing contact centre services
  • extracting data and disseminating it to customers, inside and outside the NHS
  • providing training

Income from these activities and services in 2019-20 was £43.5 million, an increase on the £33.6 million generated in 2018-19. Most of our significant invoiced income is supported by agreed work packages and is on a time and materials basis. In accordance with IFRS 15, some £0.8 million (2018-19: £3.4 million) of income was not recognised in the year but will be recognised in 2020-21 when signed agreements are in place. Most income is generated through NHS England, the Department of Health and Social Care and Public Health England.


Staff costs remained similar to 2018-19 at £188.2 million. The actual salary costs reduced by £13.1 million as a result of the implementation of the Org2 restructuring programme. This was largely offset by increases in the NHS Pension employer contribution rates and a reduced amount of headcount capitalisation.

Operating expenditure increased by £6 million, with increases in externally managed IT services being partly offset by reductions in work packages and travel costs. There was a significant increase in depreciation and amortisation as a result of the increase in capital expenditure in recent years.

A summary of capital expenditure is as follows:





Internally and externally developed software


Development expenditure


IT hardware, including desktop and corporate infrastructure


Software licences, including desktop and corporate infrastructure licences


Refurbishments, fitting out new office space and furniture


Net book value of disposals





The development of the informatics transformation programmes continues to increase the asset base of the organisation. A significant proportion of the new software and development expenditure has been created internally, with the value of internal time capitalised amounting to £13.2 million (2018-19: £17.6 million). We have invested in new cloud IT services, software applications and started the fit out of the new Leeds ‘hub’ which is due to open in 2021.

Inflationary pressures on our growing level of non-current assets have become more material. In particular, own staff capitalised expenditure has been impacted by the AfC pay awards following many years of low increases.

Consequently, we have applied a revaluation to all non-current assets from 1 April 2019 using a mix of Office for National Statistics indices, actual pay awards and assessments of other supplier increases, with the exception of software licences, where indexation has been applied up to 31 March 2019; indexation for the year to 31 March 2020 was not applied to software licences due to late changes to the index and the impact being immaterial. The revaluation impact at 31 March 2020 is an increase in net book value of £6.9 million.

Other non-current receivables includes software licences where the subscription period is greater than a year. These have not been revalued.

Current assets and liabilities

Contract receivable balances amount to £13.7 million (31 March 2019: £6.4 million). This is a significant increase and is largely due to the invoicing of certain programmes of work late in the year.

Prepayments under one year amounts to £12.3 million (31 March 2019: £11.6 million), while ‘contract receivables not yet invoiced’ amounts to £1.6 million (31 March 2019: £0.5 million), which represents work completed but not yet invoiced.

We seek to comply with the Better Payments Practice Code (BPPC) by paying suppliers within 30 days of receipt of an invoice. The percentage of non-NHS invoices paid within this target amounted to 99.1% (31 March 2019: 99.1%). The days outstanding at 31 March 2020 reduced to 9.2 days from 13.3 days at 31 March 2019, reflecting a higher than normal volume of invoices processed in March 2019.


These accounts have been audited by the Comptroller and Auditor General, who has been appointed under statute and is responsible to Parliament. The audit fee for 2019-20 was £115,000, which was unchanged from 2018-19. The audit fee only includes audit work. No additional payments were made.

The Accounting Officer has taken all steps to ensure she is aware of any relevant audit information and to ensure that NHS Digital’s auditors are aware of that information. To the best of the Accounting Officer’s knowledge, there is no relevant audit information of which NHS Digital’s auditors are unaware.

The internal audit service during the financial year was provided by the Department of Health and Social Care Group Internal Audit Service.


The importance of sustainability climbed the local, national and international agenda during the year. Since the first NHS Digital Sustainability Development Plan in 2017, we have made good progress in implementing local NHS Digital objectives, including efficiency improvements in our estate and through smarter working. This has delivered annual reductions of about 15% in gas and electricity consumption in our buildings, a 20% cut in water use and a 20% fall in business travel mileage.

The adoption of smarter working practices across NHS Digital, and in our interactions with partners, has accelerated markedly since March 2020, during the initial period of the COVID-19 response. This was forced upon us and was necessary to continuing our work, but it has helped us move to more efficient working patterns and uses of technology.

Similarly, the forced acceleration of digital collaboration as a result of the pandemic is enabling wider sustainability benefits. For example, the deployment of Microsoft Teams across the healthcare system through NHSMail has promoted more flexible and sustainable working practices at scale immediately. The benefits of this should endure. The rapid growth of our digital services at scale – such as the NHS App, greater use of online services such as NHS 111 online, the extension of electronic prescribing to a dispenser of the user’s choice, and support for the deployment of remote collaboration and consultation services across the healthcare system – is also creating a significant and positive sustainability impact.

A critical contribution to sustainability is made by more efficient and effective use of our infrastructure services. We have made initial steps in optimising our on-premise data centre consumption by moving some of NHS Digital’s workloads to the Crown Hosting co-location services, which are much more efficient, and also by adopting more public cloud-based services. In the coming year, we will take a more strategic stance in optimising the use of both local organisations’ infrastructure and their cloud-based solutions. We will work with other NHS partners to drive the optimisation of infrastructure consumption and efficiency across the health and social care technology arena. A revised sustainability effort is being mobilised from NHS Digital and will include work across our Networks and Infrastructure teams, as well as our technology suppliers, to mobilise a strategy and plan for the health and social care system.

Exit from the European Union

We have continued to review the implications of the UK’s exit from the European Union in collaboration with other health and care bodies. The potential risks identified included impacts on the supply and hosting of data, our supply chain, organisational costs and workforce recruitment and retention. We have taken appropriate steps to mitigate these.

Sarah Wilkinson

Chief Executive

7 July 2020

Last edited: 23 November 2021 12:32 pm