Business
Health and social care firms boost cash reserves and ramp up AI investment, Barclays Index shows
Health and social care businesses across the UK have strengthened their cash reserves and signalled a surge in AI investment for the year ahead, according to new data from the Barclays Business Prosperity Index.
The report — drawing on external research from 500 business leaders and anonymised data from 35,000 Barclays client businesses — reveals that firms entered the Autumn Budget period with greater caution but growing confidence in technology-led transformation.
Almost three quarters (74 per cent) of businesses in the sector reported stronger-than-average demand for their products and services in Q3, even as wider economic conditions remained strained. SMEs, in particular, responded by bolstering their financial safety nets: small health and social care firms increased savings by 6.4 per cent year-on-year, compared with a 2.4 per cent fall among larger counterparts.
Barclays’ data also indicates disciplined spending across the sector. While cash inflows dipped slightly (down 1.1 per cent), outflows declined more sharply (down 2.2 per cent), leaving net cash flow up 1.1 per cent as leaders tightened cost controls.
The overwhelming majority of businesses surveyed — 96 per cent — believe AI can benefit their organisation, with leaders highlighting gains ranging from workforce productivity to enhanced patient care.
More than four in ten (39 per cent) said AI could directly improve clinical outcomes, while a third cited better patient experience as a key driver for adoption.
A further 38 per cent said AI could ease workforce pressures by reducing burnout and freeing staff to spend more time with patients, with 33 per cent expecting technology to aid retention.
As a result, 86 per cent of health and social care businesses plan to increase AI investment over the next 12 months, with leaders estimating an average uplift of 20 per cent.
Despite the enthusiasm, barriers persist. A third of leaders (31 per cent) pointed to insufficient access to finance for new equipment or R&D, while 27 per cent said training staff to use AI tools remains costly and time-consuming. Concerns over data privacy, ethics and responsible AI use were raised by 32 per cent of respondents.
Credit demand picked up across the sector in Q3. Barclays recorded a 2.8 per cent rise in overall loan volumes, with larger companies leading demand but SMEs also showing growing appetite for investment.
Through the Barclays Business Prosperity Fund, the bank lent £405m to health and social care SMEs up to Q3 2025, supporting upgrades in digital capability, equipment and infrastructure.
Emma Palmer, Barclays UK Business Banking’s Head of Healthcare, said SMEs had adopted a cautious stance in the run-up to the Budget but are now increasingly looking to invest in growth.
“It has been a challenging time for smaller businesses, but lending has risen and demand for AI is accelerating,” she said. “We’re proud to have lent over £400m to health and social care SMEs this year and are ready to support their ambitions into 2026.”
Steve Fergus, National Head of Healthcare, Large Corporate, at Barclays Corporate Bank, said AI was central to the sector’s renewed confidence: “After turbulence and economic uncertainty, an uptick in credit demand shows ambition returning to the sector. AI is at the forefront of that ambition, with clear benefits for patient care.”
Barclays reiterated its commitment to supporting innovation through its £22bn Business Prosperity Fund, offering lending, refinancing and tailored support to health and social care businesses across the UK.
Amy Ingham
Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.
