Health and social care companies across the UK have strengthened their cash reserves and signaled a rise in AI investment in the coming year, according to new data from the Barclays Business Prosperity Index.
The report, based on external research from 500 business leaders and anonymized data from 35,000 Barclays client companies, shows that companies entered the autumn budget period with greater caution but growing confidence in technology-enabled transformation.
Almost three quarters (74 percent) of companies in the industry reported above-average demand for their products and services in the third quarter, even though the general economic situation remained tense. SMEs in particular responded by strengthening their financial safety nets: small health and social care businesses increased their savings by 6.4 percent year-on-year, while larger companies saw a decline of 2.4 percent.
Barclays data also points to disciplined spending across the sector. While cash inflows fell slightly (down 1.1 percent), outflows fell more sharply (down 2.2 percent), sending net cash flow up 1.1 percent as leaders tightened cost controls.
The overwhelming majority of companies surveyed – 96 percent – believe AI can bring benefits to their business, with executives highlighting benefits ranging from workforce productivity to improved patient care.
More than four in ten (39 percent) said AI could directly improve clinical outcomes, while a third cited a better patient experience as a key reason for adoption.
A further 38 percent said AI could ease pressure on the workforce by reducing burnout and allowing staff to spend more time with patients, with 33 percent expecting the technology to support patient engagement.
As a result, 86 percent of healthcare and human services companies plan to increase their AI investments over the next 12 months, with executives estimating an average increase of 20 percent.
Despite the enthusiasm, obstacles remain. A third of executives (31 percent) cited inadequate access to funding for new equipment or research and development, while 27 percent said training staff to use AI tools remains costly and time-consuming. 32 percent of respondents expressed concerns about data protection, ethics and responsible AI use.
Credit demand increased across the industry in the third quarter. Barclays recorded a 2.8 per cent increase in total loan volume, with larger corporates leading demand but SMEs also showing a growing willingness to invest.
Through the Barclays Business Prosperity Fund, the bank lent £405 million to health and social care SMEs by the third quarter of 2025, supporting the modernization of digital capabilities, equipment and infrastructure.
Emma Palmer, head of healthcare at Barclays UK Business Banking, said SMEs had taken a cautious stance in the run-up to the Budget but were now increasingly looking to invest in growth.
“It has been a challenging time for smaller businesses, but lending has increased and demand for AI is accelerating,” she said. “We are proud to have lent over £400 million to health and social care SMEs this year and stand ready to support their ambitions through to 2026.”
Steve Fergus, National Head of Healthcare, Large Corporate, at Barclays Corporate Bank, said AI was central to the sector’s renewed confidence: “After turmoil and economic uncertainty, a surge in credit demand shows the sector is ambitious again. AI is at the forefront of this ambition, with clear benefits for patient care.”
Barclays reiterated its commitment to supporting innovation through its £22bn Business Prosperity Fund, which offers loans, refinancing and tailored support to health and social care businesses across the UK.
