Will The Transformation Fund Deliver The Change Our NHS Needs? The Real £3.25 Billion Question

The NHS isn’t broken because of who’s been in charge. It’s broken because of how it works and how change has been managed historically.

Announced earlier this year, the Government’s latest shake-up — scrapping NHS England and absorbing control back into the Department of Health — is being billed as a bold, historic move. Add to that a £3.25 billion transformation fund and a 10-Year Health Plan promising leaner operations, digital-first care, and more joined-up thinking.

On paper, it looks ambitious. In reality? We’ve seen this before.

If you’ve worked anywhere near the frontline, you’ll know the problem isn’t structure — it’s the day-to-day experience of trying to deliver care through broken systems, outdated processes, and exhausting workarounds. That’s where change fails: not in vision, but in execution.

Is the NHS culture broken? Have frontline NHS workers become exhausted with “eternal or constant transformation” that only delivers change for the worse or change they will ignore? Or are our NHS heroes also to blame for not embracing change?

As someone who helps NHS Trusts deliver transformation that sticks, I can say this with certainty: transformation doesn’t fail because of policy. It fails when change isn’t built around people, process, and behaviour.

It’s talked about – but rarely fixed.

We don’t need another top-down restructure. We need a ground-up redesign that tackles what really stops progress: poorly managed change, disjointed processes, and systems that make it harder — not easier — to care for patients. There is a need to work together with the NHS, avoiding a them-and-us environment. The aim has to be to design processes and systems together, factoring in everyone’s needs that answer the why before we get to the how.

If we want different results, we need to stop rearranging the same puzzle pieces — and start changing the board entirely.

The Government’s reform and the real problems

To understand what impact transformation could deliver, we first need to be honest about the reality on the ground, because without addressing the deep-rooted inefficiencies and disjointed infrastructure that hold the NHS back, any reform risks becoming just another layer of complexity.

As Bev Wright, Head of UKI Public Sector at Adobe, quite rightly says: “The Transformation Fund is a welcome signal of the government’s intent to unlock the enormous productivity and capability benefits of AI, but without organising government and citizen data, and replacing out-of-date legacy systems first, there is a risk it won’t actually move us forward.”

Here’s the ambition and the uncomfortable truth:

What the government says this move will achieve:

• Reduce layers of bureaucracy
• Centralise decision-making
• Streamline operations and funding

What the transformation fund is positioned to deliver:

• Reduce inefficiencies
• Drive transformation and reform
• Support a leaner, more cost-effective public sector

But the reality is more complicated.

At a system level, the NHS still suffers from fundamental operational inefficiencies: siloed data, fragmented digital systems, a lack of interoperability, poor process design, and a culture that prioritises hitting KPIs over improving patient experience, while costs are cut.

The State of Digital Government Report, which surveyed public sector executives to better understand the challenges and opportunities facing central and local government, found that over half (50.4%) of organisations dedicate more than 40% of their time and budget simply to maintaining legacy systems, rising to nearly 63% among arms-length bodies.

In the NHS, 42% of respondents in the same report admitted that more than 40% of their processes are still paper-based. These legacy systems do not just drain resources; they actively stand in the way of agile, patient-focused digital services, delaying progress and compounding transformation fatigue.

The other risk? Running before we can walk.

AI has been flagged as a key focus area within the Government’s transformation fund, positioned as a game-changer for NHS efficiency. But there’s a danger in pushing adoption before the groundwork is in place.

Many NHS Digital and IT leaders are rightly cautious. Without clear governance, robust data foundations, and the right resourcing, AI could become just another burden — not a breakthrough. And with the upcoming AI Act set to introduce new regulation, there’s real concern that poorly scoped initiatives could quickly become non-compliant, shelved, or worse — add complexity to already overstretched teams.

Even as the Government’s 10-Year Plan promises neighbourhood health centres and digital-by-default care pathways, unless the right operational foundations are put in place, we risk repeating the mistakes of the past.

The risk of another ‘reorganisation without reform’

Previous NHS reorganisations, however well-intentioned, have often increased complexity instead of reducing it. Layering new governance structures onto broken systems will simply move old problems around the organisation, not solve them.

That technical debt can’t be erased by rebranding. It must be resolved operationally.

Even worse, the financial pressures facing NHS providers have never been more acute. Trusts are now expected to deliver 4% efficiency savings in 2025/26 — almost double last year’s 2.2% target and over four times the NHS’s historical productivity growth rate of just 0.9%.

These demands are coming at a time when real-terms funding growth, once adjusted for cost pressures, is closer to 2% despite a 4% nominal uplift.

This combination of rising expectations and constrained resources risks pushing leaders toward short-term, superficial cuts rather than the deep, structural reform that’s actually needed.

A two-year transition period to abolish NHS England and its support network sounds manageable on paper, but what happens in the meantime?

• Will critical transformation projects stall?
• Will funding uncertainties freeze progress on digital upgrades?
• Will frontline staff be left to paper over the cracks again?

The dissolution of NHS England has also created a vacuum around how funding is accessed. Previously, NHS England held and distributed budgets to Trusts. Now, many of those Trusts are left in limbo, unsure who to turn to, how to unlock funds, or whether to press pause on digital upgrades entirely. Some Trusts have already shelved transformation efforts due to this lack of clarity.

That’s why the ability to control processes and maximise the use of available funds has never been more vital. In this uncertain financial landscape, Trusts need to make every investment count. Rushed decisions or mismatched systems will only deepen the transformation fatigue many are already experiencing.

Without clear safeguards, the upheaval risks deepening the problems it’s meant to solve.

The top five priorities the Government must implement to get this transformation right

This doesn’t have to be another missed opportunity.

If the Government truly wants to reform the NHS, it must stop rearranging governance structures and start fixing the operational reality on the ground, especially now, with funding flows disrupted and many Trusts unsure how to move forward.

That means making changes that are strategic, not superficial, and grounded in the true daily experience of NHS staff and patients alike. Especially now, as the 10-Year Health Plan aims to rebuild the NHS around community-first care, personalised services, and expanded digital tools.

We don’t need more governance. We need more clarity on how care is delivered and how technology enables it. Intelligent transformation starts at the operational level, not the boardroom.

And that is where intelligent process redesign and change management come into play – helping Trusts translate ambition into sustainable action.

Here’s what must change:

1.     Follow the patient, not the process

The system must be designed around the full patient journey, not the organisational silos. Clinicians cannot treat what they cannot see.

The 10-Year Health Plan promises to rebalance care around patients’ lives. But that vision will fail without a digital infrastructure that follows the full patient journey — from GP to hospital to community care — in real time.

At Nottingham University Hospitals, before rolling out electronic prescribing, we mapped the entire patient journey — across wards, roles, and systems — to surface gaps and ensure the digital tools matched real workflow. The result: fewer handover delays, better coordination, and safer prescribing from day one.

This isn’t about consolidating systems. It’s about interoperability: making different platforms speak the same language so staff can make safer, faster decisions with less cognitive load.

2.     Fix the way people work before you digitise it

Technology should amplify what works — not hard code what doesn’t. That means designing around process and behaviour, not just buying new tools.

Digital tools should amplify good practice, not compensate for broken processes.

This is where capability mapping comes in: a structured method to understand how departments work, where breakdowns occur, and where digital tools can drive meaningful change.

Technology should never lead transformation. It should support it. We need to understand how people work before we ask them to work differently.

This was the foundation of our work with Nottingham University Hospital, where we mapped the patient’s journey from admission to discharge, marking every in-person, system and data interaction, ahead of their EPMA rollout, preventing hidden inefficiencies from being hardcoded into the new system.

3.     Stop draining staff to power broken systems

NHS teams do not need resilience training. They need systems that work. If change is exhausting, it’s probably bad change.

This isn’t about implementing a process and considering it job done. It’s about getting constant feedback from all parties as to why things could be improved or are not working. It’s about role reviews, document workarounds, getting pain points and staff improvement opportunities constantly analysed. Change only works well when it is continuous.

Digital change has become synonymous with extra effort. That needs to stop.

Transformation that isn’t led by real frontline input will fail. Again. Staff want to help shape change, not have it done to them – the foundations of change management – co-creation, ownership and human-centred design.

Frontline engagement is not a tick-box exercise; it’s the bedrock of sustainable reform. Transformation fatigue sets in when initiatives demand work and adjustment but do not yield the improvements they set out to deliver. That is why we work with teams in high levels of collaboration to truly produce results that reduce friction, simplify workflows and return time to care.

4.     Trust the people closest to the patient

ICBs understand the pressures, needs, and digital maturity of their communities in ways no national body ever could. They’re not a risk to reform — they’re the key to making it work.

Reform won’t land unless local teams have the space to adapt and lead. The best transformation efforts flex to real-world context, not theoretical blueprints.

The Government’s role is to set direction, analyse what is and isn‘t working, and implement the necessary guardrails to guide the direction of travel. But execution? That belongs to those doing the work on the ground.

5.     Redefine what ‘good’ looks like

Dashboards for dashboards sake don’t save lives. Dashboards that help provide a faster diagnoses, enable swifter decisions to aid better recovery, and create fewer delays – that is the kind of success patients notice.

If the patient’s journey is smooth for the system, but painful for them — your metrics are measuring the wrong thing. A happy balance needs to be struck.

Data is only valuable if it leads to knowledge and action. Without interpretation and application, it’s just noise. Know what data you need, why you need it, who will use and how will you use it. If a data set is never used, why capture it at all?

We need to reframe what good looks like, prioritising outcomes that matter to patients and clinicians. Faster recovery, earlier diagnosis, fewer delays, and higher confidence in care. That’s the transformation that counts.

A once-in-a-generation opportunity

This reform could be a defining moment for the NHS.

But it will only deliver if we focus on the right issues: the operational ones. We need to stop pushing transformation onto NHS staff and start designing services with them, listening to all parties to create processes and change that is built for them.

That’s where effectively managing the change becomes not just useful—but essential. Change Management isn’t about communication plans and training slides. At its best, it’s the art and science of helping people adopt new ways of working with clarity, confidence, and purpose. When done well, it aligns strategy with behaviour, surfaces hidden blockers, and ensures that transformation sticks.

It’s the missing link (people) between vision and reality – and too often, the reason transformation fails.

At Differentis, we’re already working with Trusts, to identify how people are actually working and identify where true value can be found to improve the service of care for both practitioners and patients.

From there, we’re helping their leaders define the business case for change, prove value from existing initiatives, and map the capabilities they already have, ensuring they can make confident progress, even when the funding picture is unclear.

Our clients don’t need off-the-shelf fixes. They need tailored solutions that reflect the pressures, politics, and people in their organisations. That’s what we do. We specialise in making transformation real through intelligent transformation: operational insight, people-first design, and strategic change management that delivers results.

The NHS doesn’t just need a new structure. It needs a new strategy, one built on data and evidence, not assumptions.

Real reform means redesigning the system from the inside out, and that starts with listening to those inside it.

Erica Hodgson, Change Management Practice Director at Differentis