NHS Discretionary Spend - AI Revolution
We face the same universal problems in every project. Used peoperly, AI can be a major support. Here we use Discretionary Spend as a specific use case to explan how AI can be utilised to improve our productivity and our wellbeing!
Click here to Download the Summary Report
Click here to Download a formatted Summary Deck (to share with colleagues)
Report: Systemic Reform in NHS Processes
To: Interested Stakeholders
From: Anthony Lawton (https://www.fittocare.co.uk/ ) & Andy Wilkins (https://www.beadvisory.com/ )
Date: 25 July 2025
Subject: Summary of Core Themes on Systemic Reform, Using Discretionary Spend as a Case Study
1.0 Executive Summary
This report summarises the key findings from a detailed discussion on systemic reform within the NHS, using the discretionary spend process as a primary case study. The analysis reveals that many current processes, while intended to increase control and savings, are often counterproductive. They create significant bureaucracy, waste, and "failure demand" (rework), which negatively impacts staff morale and overall productivity.
The core problems identified are a lack of focus on end-to-end process flow, siloed operations, and a cultural deficit of trust and empowerment. The proposed solution is a strategic shift towards a people-centric, flow-optimised model. Artificial Intelligence (AI) is identified not merely as a tool for automation, but as a fundamental enabler of this transformation, capable of improving decision-making, streamlining complex workflows, and fostering a culture of continuous improvement and value creation.
2.0 Problems and Key Themes
The discussion identified several universal problems that manifest across various NHS systems, exemplified vividly by the challenges within discretionary spend processes.
2.1 Foundational Process Failures: The "Sausage Machine" Mentality
The current approach often treats processes like an industrial "machine," squeezing for efficiency rather than designing for effectiveness. This leads to three critical failures:
Lack of Focus on Flow: Systems are fragmented into silos, with each department focused on its own metrics rather than the seamless, end-to-end journey required to serve a patient or colleague.
Pervasive Waste: The system is burdened with "dark matter"—bureaucratic processes, unnecessary forms, and duplicated efforts that consume vast resources without adding value to the final outcome.
High "Failure Demand": A significant amount of work is generated by the need to correct mistakes or address incomplete information from earlier steps. This rework is a direct result of systems not being designed to get things right the first time.
2.2 Dysfunctional Culture and Siloed Operations
The operational model creates a dysfunctional and demoralising work environment.
The Blame Game and Loss of Trust: Top-down, command-and-control mandates (e.g., "you must implement this process") are perceived by staff as a message of distrust. This erodes goodwill and creates a feeling of being a "cog in a machine."
Siloed Thinking: Staff are incentivised to protect their own silo, often disrespecting the needs of the next person in the flow. This results in poorly designed forms and processes that optimise for one department at the expense of the entire system.
Negative Impact on Staff Wellbeing: The constant "tightening of the screw" with new, duplicative, and seemingly pointless processes leads to frustration and burnout, taking staff away from the core mission of patient care.
2.3 The Universal Challenge of Information Overload
A core problem underpinning these failures is the inability to manage vast amounts of information effectively.
Inaccessible Guidance: Staff are expected to make optimal decisions but lack the time to read and digest voluminous guidance documents (e.g., 50-page manuals for a simple process).
Poor Quality Input: Without timely access to the right information, users submit incomplete or poorly justified requests, which directly fuels failure demand and rework down the line.
2.4 The Discretionary Spend Case Study: A System Generating Negative Value
The discretionary spend process serves as a perfect example of these themes in action:
A Costly "Industry in Itself": The administrative overhead of running the process often outweighs the "trivial" savings it generates.
Significant Delays: Requests can take from two weeks to over 90 days, creating serious unintended consequences and hindering the ability of staff to do their jobs.
False Economies: Blunt cost-cutting measures (e.g., switching to second-class stamps) can create much larger costs elsewhere in the system (e.g., missed appointments).
3.0 The Strategic Solution: A New Approach Enabled by AI
The proposed solution is a fundamental strategic shift, moving away from the current model and leveraging AI to create a more intelligent, responsive, and empowering system.
3.1 A Strategic Shift from "Command" to "Empowerment"
The primary goal is to transform burdensome processes into proactive, value-adding exercises.
Trust and Empower Staff: Shift from a top-down mandate to a collaborative model that taps into the intelligence of frontline staff, making them active participants in optimising value.
One-Stop-Shop Design: Redesign systems from a user perspective, consolidating duplicated processes (e.g., waivers, procurement, discretionary spend) into a single, intelligent, and streamlined interface.
3.2 AI as a Live Guide and Intelligent Advisor
AI is positioned to directly address the information overload problem and improve the quality of work from the very first step.
Real-Time, Contextual Guidance: Instead of a 50-page document, AI can provide the specific rule or piece of guidance a user needs at the moment of decision, ensuring compliance and optimising choices (e.g., suggesting a more cost-effective type of paper).
Intelligent Critique: AI can act as an "intelligent advisor," reviewing a submission in real-time and prompting the user for more evidence or a stronger justification before it enters the workflow. This radically reduces failure demand.
3.3 AI for Streamlining Workflow and Reducing Bureaucracy
AI can redesign the flow of work to be dramatically more efficient and less burdensome.
Intelligent Routing: The system can automatically differentiate between a low-value, contractually committed purchase and a high-value, complex request, routing them through appropriately tailored levels of scrutiny.
Automated Panel Management: AI can eliminate the manual administrative work of organising panels. It can provide panel members with concise, well-evidenced summaries and even a "value score," allowing them to make faster, more informed decisions.
Transforming Turnaround Times: This approach aims to shift the process from a two-week average turnaround to a 24-hour standard, with flexible, asynchronous reviews for panel members instead of blocking out entire days.
3.4 AI in System Design and Continuous Improvement
Beyond a single process, AI is a tool for building a system that learns and improves.
Designing Better Systems: AI can be used in the design phase to model complex flows, predict unintended consequences, and ensure all parts of the system are integrated effectively.
Creating Learning Loops: By capturing user feedback on services within the process (e.g., rating a supplier for a contractually committed spend), the AI-powered system creates a valuable data stream for long-term improvements in areas like commercial and procurement.
4.0 Conclusion
The current challenges in processes like discretionary spend are symptoms of a deeper, systemic issue rooted in siloed thinking and a lack of focus on end-to-end flow. The proposed solution is not to simply automate the existing "fungus" of bureaucracy, but to use AI as a superpower to fundamentally rethink and redesign how we work.
By shifting to a model of empowerment and leveraging AI for intelligent guidance, workflow automation, and system design, we can transform these burdensome processes. The outcome is a system that is not only more efficient but also has greater control, adds tangible value, improves staff morale, and ultimately frees up resources to focus on our core mission: providing excellent patient care.
