The Autumn Budget 2026 puts technology at the heart of the Government’s plans to improve public sector productivity, with a particular focus on the potential for AI and technology to transform NHS services, free up staff time and improve outcomes for patients.
For AI, digital health and robotics businesses, that presents a clear opportunity. But being technologically ready is not necessarily the same as being commercially ready.
Government backing for AI in the NHS
The Government has requested an independent review on NHS productivity and AI, which is due to report in early 2027 and inform the next Spending Review. The review will consider practical opportunities for AI and technology to transform services for patients and boost NHS productivity.
The Budget includes a £15 million AI Challenge Prize for UK based innovators and businesses, administered by Department for Culture, Media and Sport. The first competition will focus on the NHS, with a top award of up to £2.5 million for the most promising solution to a priority healthcare challenge.
An additional £80 million is also being provided for Sovereign AI’s R&D Procurement Scheme, creating further opportunities for innovative British AI companies to work directly on significant Government challenges, including within the health and care system and around AI security, assurance and safe adoption.
For technology businesses capable of improving NHS productivity, workflows and services, the direction of travel is encouraging. But businesses hoping to capitalise on that investment should be asking now whether they are genuinely ready to do so.
Are you ready to tender?
Securing an NHS or wider public sector contract is about more than demonstrating an innovative product.
A business needs to understand exactly what intellectual property it owns, particularly where technology has been developed by founders, contractors or third parties, or uses open source components. It should also understand what rights it can, and is prepared to, grant to a customer.
Commercial terms are equally as important; implementation responsibilities, service levels, acceptance testing, warranties, liability, indemnities, termination rights and ownership of future developments can all become significant points of negotiation.
For a scaling technology company, there can be considerable commercial pressure to accept customer terms to secure an important contract. Before doing so, businesses need to understand the exposure they are taking on and check that their arrangements with developers, hosting providers and other suppliers support the commitments they are making to the customer.
Data protection and cyber security from the outset
Where NHS technology involves personal data, particularly health information, data protection should form part of the product and commercial strategy from an early stage.
Businesses should understand what data their technology processes, why it is needed, where it is stored, who can access it and which third parties are involved.
AI can add further complexity. Depending on the technology, businesses may need to consider how personal data interacts with the development and improvement of AI systems, how outputs are produced and reviewed, and what transparency and human oversight are appropriate.
Cyber security is equally important. For businesses hoping to supply technology into healthcare, cyber security should therefore be treated as a core commercial and governance issue, not simply something for the IT team to address at the end of the procurement process.
Robotics: significant opportunity, but greater risk
The Budget commits £100 million to accelerate the adoption of robotically assisted surgery across England, supporting an increase from 70,000 procedures a year today to 500,000 in 2035. It also refers to a national robotics registry using data and AI to improve outcomes and drive innovation in surgical care.
There is further support for the sector through an additional £60 million for the Sovereign AI Fund from 2027/28, including a new focus on “physical AI”, building on UK strengths in robotics, autonomous systems and advanced manufacturing.
For UK robotics businesses, this is potentially significant. But deployment in healthcare can considerably increase both regulatory and commercial risk.
The closer technology gets to clinical decision making or physical interaction with patients, the more important questions of safety, responsibility and risk allocation become.
Businesses operating in this space may need to consider the medical devices regulatory framework, product safety, testing and validation, clinical responsibility and appropriate human oversight, alongside more conventional commercial issues including IP, maintenance, software updates, data protection, cyber security, insurance and contractual liability.
For higher risk technologies, these should not be issues considered only when a procurement exercise begins or a customer contract opportunity arises. They should be factored into the commercialisation strategy much earlier.
Setting your business up for success
The Budget is a clear signal of Government appetite for AI, digital technology and robotics to play a greater role within the NHS.
For businesses developing solutions in those areas, now is a sensible time to look at whether their legal and commercial foundations support their ambitions.
Some of the questions to consider include:
- Do we own the technology and other IP we are seeking to commercialise?
- Do our contracts with developers, suppliers and technology providers give us the rights and protections we need?
- Can we demonstrate appropriate data protection, cyber security and AI governance?
- Do we understand what promises we can safely make about our technology?
- Do our customer and supplier contracts allocate responsibility consistently?
- Do we understand the regulatory framework that applies to the product and its intended use?
- Are the liabilities we are being asked to accept proportionate and, where appropriate, insurable?
These issues need not be a barrier to innovation. Addressed early, they can help businesses approach procurement exercises, investment opportunities and customer negotiations from a stronger position.
How Stephens Scown can help
At Stephens Scown, we work with technology businesses throughout the lifecycle of their products, from early development and commercialisation through to scaling and major customer contracts. Our multidisciplinary teams can support businesses preparing for opportunities within the NHS and wider public sector across commercial and technology contracts, intellectual property, data protection and AI governance, cyber risk and relevant regulatory considerations.