In what the Treasury will no doubt view as a cost-saving miracle, the National Health Service has successfully repelled a national cyber attack by reverting to the most analogue of defence mechanisms: pen and paper. The attack, which targeted IT systems across the health service, forced 100 hospitals to abandon digital record-keeping. Yet instead of grinding to a halt, the NHS has been praised for its resilience. One can almost hear the sighs of relief from Whitehall as they realise the potential savings on IT procurement.
The irony is thick enough to cut with a scalpel. For years, we have been told that digitisation is the only way forward, that paper records are inefficient and archaic. Suddenly, faced with a digital siege, the old ways prove not only resilient but superior. The market, however, is less impressed. Gilt yields have nudged upward as investors price in the risk that such disruptions could slow the already sluggish productivity gains in the public sector. Capital flight remains a concern, though the pound has held steady, perhaps because foreign investors see this as a peculiarly British triumph of pluck over planning.
Make no mistake: this is a victory for fiscal responsibility, even if accidental. The cost of maintaining a cyber-secure digital infrastructure is immense, and the NHS has long been accused of underinvesting in IT. Now, that underinvestment looks like a feature, not a bug. But let's not get carried away. The long-term solution is not to retreat to the 19th century. We need a robust, secure digital system that can withstand attacks. But the immediate aftermath has provided a stark lesson: sometimes the most effective defence is to have nothing worth attacking.
The real test will come when the Treasury looks to codify this 'pen and paper' contingency as a permanent cost-saving measure. Bank of England Governor Andrew Bailey should watch closely; if the NHS can run on paper, perhaps the MPC can ditch its spreadsheets for abacuses. The bottom line is this: the NHS has inadvertently stumbled upon a low-tech solution to a high-tech problem. It may not be elegant, but it works. And in the world of public finance, that is the highest praise.
