The Scale Gap: Why the NHS must scale its digital mental health ambition
March 18, 2026Post Title
Digital technologies including extended reality (XR) are rapidly reshaping how mental healthcare can be delivered, offering new possibilities for treatment, training, and patient engagement.
But while the evidence of benefits of digital mental health is growing, the real challenge lies in the NHS creating the environment for promising solutions to be deployed sustainably at scale.
At a recent Mindset-XR roundtable, leaders explored what it will take to bridge that gap.
Below Health Innovation Network South London's Commercial Director, Anna King, shares her reflections.
Short and Sweet Headlines are Best!
Short and Sweet Headlines are Best!
The current landscape
At this energising roundtable, chaired by Julian David, OBE, Chief Executive Officer of techUK, and featuring strong engagement from a wide range of stakeholders, we explored how digital technologies, including XR, are already being used to support psychological therapies, workforce training, and patient engagement in new and innovative ways.
The evidence of benefits is growing and these deployments are encouraging. Nevertheless, the infrastructure needed for widespread adoption is still emerging. Much of the digitisation so far has been reactive and tactical, focusing on pathways already in crisis where solutions are solving short-term or localised problems.
Rather than adopting a strategic, scalable approach that uses early digital intervention to reduce reliance on traditional treatment, digital support could be used alongside existing services to improve access, enhance outocmes, and identify when escalation is needed.
Momentum is certainly building with initiatives such as Innovate UK’s Mindset-XR programme which is investing in the development of immersive mental health technologies. Through the Mindset-XR Innovation Support Programme, which we lead along with our delivery partners, innovators are being supported to develop solutions that can be adopted by the NHS.
However, the NHS must now shift from promising pilots to system‑wide adoption.
Why scale matters
Mental healthcare need across the UK remains high and continues to grow, particularly among children and young people.
Every month, around 400,000 – 450,000 people are referred into secondary mental health care, and one in five children now has a diagnosable condition, with average waits exceeding 280 days. These pressures lengthen waiting times, strain clinical teams and affect wider economic and societal outcomes such as workforce participation and productivity.
Digital mental health solutions could offer a scalable, cost-effective way to expand access and relieve overstretched services. Evidence shows they can reduce delivery costs compared to traditional therapy models, improve outcomes when used appropriately, and integrate well into blended pathways of care.
The UK digital mental health market is accelerating, growing from around $2 billion in 2024 with projections of $13 billion by 2035. Driven by rising public acceptance, innovation and programmes like Mindset-XR, XR technologies are gaining traction in exposure therapy, skills development and workforce training — expanding their potential impact.
At the roundtable, one of the strongest messages was the economic urgency behind scaling digital mental health.
Broader analysis suggests that health and digital innovations together could boost the UK economy by £278 billion through improved health outcomes and reduced demand on services.
Scale is vital for the UK to achieve this – as digital solutions must operate across more systems as wider deployments will allow the costs of development to be recouped more swiftly, and competition will enable companies to operate at a price point based on marginal cost that is significantly below traditional services.
For the UK, becoming a global leader in digital mental health is therefore not only a social priority but an economic imperative.
What successful digital health companies do differently
Short and Sweet Headlines are Best!
Roundtable participants identified four key success factors shared by digital mental health companies that are successfully scaling in the UK:
Make it easy for the user
Platform models that bundle multiple products under a single interface for users, whether clinician or patient, have proved far more scalable than single issue point solutions. This might be a mental health specific tools, or it could be integration into an established platform like an electric health record system, NHS App or digital health formulary. Licencing models that simplify use and encourage uptake, though removing disincentives and barriers to use are vital.
Solve urgent priorities
Successful companies deliver solutions that directly address pressing NHS priorities, often by pivoting products to where the greatest need or policy focus lies. Outcomes-based contracting that aligns incentives with NHS priorities and can allow purchases to access funding and business case can better support uptake. Centralised at scale procurement, such as those in Scotland and Wales recently, also help companies demonstrate whole-system impact.
People over technology
The most successful companies design first for people, patients, clinicians, support staff, not for the technology. They engage clinicians early, embed strong change management, and ensure new tools lighten workloads rather than adding to them. A strong example is Tend VR whose solution became the first VR mindfulness-based cognitive therapy to be deployed by the NHS launched with Tees, Esk, Wear Valleys NHS Foundation Trust.
How the NHS can help scaling
In our discussions, we noted a clear need for the innovative solutions being developed, but the NHS needs to support more ambitious adoption.
High demand, low capacity
Services under intense pressure often lack the time or resource to implement new technologies, train teams, or redesign pathways. This creates ‘change fatigue’. This can lead to uneven adoption, delays in real‑world impact and a sense among some teams that new digital innovations risk adding pressure rather than relieving it. The Health Innovation Network is often asked to help support trusts with transformation and adoption of innovations, building capacity and capabilities on NHS teams with programme like DigitalHealth.London Digital Pioneers programme.
A crowded market with evidence gaps
With over 10,000 digital mental health tools available, decision‑makers sometimes can feel overwhelmed with potential solutions. The Health Innovation Networks can help organisations find and evaluate innovative solutions. NICE is helping fill evidence gaps, particularly around implementation and economic value to improve confidence in products.
Structural and regulatory barriers
The NHS must be more ambitious in how it procures digital solutions, to allow that important combination of plurality and choice with scale. Some of the roundtable participants highlighted that procurement remains fragmented, requiring repeated business cases and governance processes. Lengthy and costly regulatory pathways, especially for XR and AI-enabled tools, can make it difficult for smaller innovators to navigate the system. While initiatives like the NHS’s proposed innovation passports may help, companies also looks to programme like DigitalHealth.London Evidence Generation Bootcamp .
The NHS needs to be a better customer to encourage investment
NHS short funding cycles create uncertainty and make it harder for companies to raise investment. Venture capital typically prefers companies the potential to sell at volume, and so favour companies with international potential, which can disadvantage companies dependent solely on the NHS’s sometimes long and unpredictable sales cycles.
Building the infrastructure for scale
The roundtable highlighted three system-level enablers needed to allow digital mental healthcare to be deployed at scale.
1. The NHS needs a range of different platform solutions to support competition and digital adoption
Platform solutions already in use by clinicians and the public can be used to serve-up
trusted, evidence-based tools, as well as help clinicians and patients identify the best validated tools to use and integrate them into care. If clinicians are not expected to memorise every pharmaceutical, they should not be expected to navigate thousands of digital tools unaided. Dynamic open formularies of tools should be embedded into electronic health records, patient portals and the NHS App.
Competition rather than single solutions is helpful when products are still developing in a market as dynamic as digital health. All platforms should allow choice and competition among similar products, along with embedded evaluation of outcomes and impact.
The development of a fully digital hospital presents an exciting opportunity to model end-to-end digital pathways, including for mental health.
2. Creative commercial models
New commercialisation models need to be mandated by the NHS to help successful innovators scale, while products are continually evaluated and developed, reducing risk for both the health system and innovators and their investors. These could include:
- Ensuring open and low‑cost APIs that allow innovators to easily and safely slot into established systems for evidence generation and access to customers.
- Implementing publisher models where scaling infrastructure is shared, either managed by the NHS or by independent companies, to allow innovators to test potential solutions affordably.
- Offering hybrid payment options that allow people to self‑pay for additional functionality or duration, such as freemium models.
- Encouraging direct‑to‑consumer routes which can generate “patient pull”, something commissioners increasingly value.
- Introducing prescription models that, like medicines prescriptions, mean some people co‑pay for access to certain digital tools or associated devices (e.g., headsets, wearables), similar to the primary care medicines model in the UK.
3. Impact-driven funding
Once the NHS is a better customer, there is scope for increased and longer-term investment. We also discussed how some investors are moving toward longer cycle, socially oriented approaches. Examples include PXN Group, Daring Capital and Better Society Capital, which align investment decisions with health system needs rather than short-term returns.
Government funding is also shifting toward backing fewer companies more deeply, supporting growth and evidence generation. Health Innovation Networks play a central role in bridging this gap supporting evidence development, pathway integration and lived experience engagement.
Closing the scale gap
At the roundtable, there was strong shared emphasis on the importance of having a predictable, transparent route from concept to scale. This includes:
- Problem-focused co‑design with users
- Robust but proportionate economic, clinical and implementation evidence
- Faster and predictable regulatory clearance
- Streamlined but ambitious procurement
- Deployment of digitally enabled real-world, hybrid and end-to-end digital pathways at scale
When these conditions exist, technologies can scale swiftly from promising pilots to population level impact improving care quality and efficiency. With the right ambition, the UK can lead globally while delivering more accessible, effective and equitable mental healthcare for all.
