Health And Social Care Businesses Build Cash Buffers But Double Down On AI Investment Plans

The Barclays Business Prosperity Index report, combining external research of 500 business leaders and anonymised client data of around 35k UK businesses in health and social care looking back on Q3 and ahead to the future, reveals:

• Prior to the Autumn Budget savings buffers increased, most notably amongst SMEs
• Net cash flows displayed signs of recovery amidst disciplined spend control
• The majority (74 per cent) of health and social care businesses reported a stronger than average demand for products and services during Q3
• Almost all (96 per cent) believe AI can benefit their business, with 39 per cent backing its impact on clinical outcomes
• 86 per cent are planning to increase investment in AI over the next 12 months, with leaders estimating an uptick of 20 per cent on average

Barclays Business Prosperity Index data shows that health and social care businesses are reporting stronger demand for their products and services, as leaders turn to AI to drive efficiencies and improve clinical outcomes.

Nearly three quarters (74 per cent) of business leaders in the health and social care sector reported that sales pipelines and overall demand for their products and services were stronger than average for Q3.

A large majority (86 per cent) of leaders surveyed in the health and social care sector, reported plans to increase investment in AI over the next 12 months, with nine out of 10 (96 per cent) believing that it will deliver tangible benefits for their business.

AI solutions were among the highest investment priorities across the sector, with four in 10 respondents (39 per cent) reporting that AI could improve clinical outcomes. The positive impact on quality of patient care and user experience (cited by 31 per cent) is a clear motivation for increased investment in the technology.

Business leaders also underlined the benefits of AI to their own bottom line, with 38 per cent saying it could improve employee wellbeing and reduce burnout. The same number said that the technology could be used to streamline processes, allowing staff to spend more time with patients, and a third (33 per cent) of respondents said it would improve workforce retention.

This sentiment equates to business leaders reporting to increase AI and tech investment by a fifth (20 per cent) over the next 12 months.

Finance and upskilling key for AI adoption

Despite enthusiasm for the potential of AI, health and social care business leaders called out a number of barriers to investment and implementation, including:

• lack of finance for new equipment or R&D (31 per cent)
• the time and cost involved in training staff to use new AI (27 per cent)
• concerns about privacy, ethics and responsible AI use (32 per cent)

Barclays client data also showed a gradual improvement in credit demand in Q3, suggesting higher confidence and ambition to invest. Loan volumes grew by 2.8 per cent across the quarter – predominantly driven by larger UK Corporate Bank clients, which skew towards sizeable care businesses.

This lending appetite tallied with businesses across all sizes reporting plans to increase investment across the board, by 6.8 per cent over the next 12 months.

Emma Palmer, Barclays UK Business Banking’s Head of Healthcare, said:
“It has been a challenging time for smaller health and social care businesses, with increasing cost pressures and low consumer confidence. This is reflected in the data, with SMEs increasing savings by over six per cent year-on-year in the last quarter, reflecting a cautious approach ahead of the Chancellor’s Autumn Budget. Despite this, we have seen an increase in SME lending, driven by our targeted approach to improving access to finance for health and social care SMEs.

“Looking ahead, it is encouraging to hear the ambition of business leaders to invest in AI technologies to streamline processes, reduce operating costs, and improve patient care.

“We are proud to have lent over £400m to health and social care SMEs this year and are ready to support their investment plans as they aim to grow and improve patient outcomes in 2026.”