The National Health Service in England has reversed its decision to block doctor app Babylon from expanding into Birmingham after setting out plans to radically ramp up its digital ambitions.

Babylon had applied last year to launch a remote video consultation service, called GP at Hand, in Birmingham, Britain’s second-biggest city, but the application was blocked after a local NHS body raised safety concerns.

However, NHS England confirmed on Wednesday that it had lifted the block. The decision marks a significant shift in the health service’s approach to the start-up, which has faced widespread criticism and resistance in its home market.

“We welcome the decision to allow the expansion of Babylon GP at Hand to people living and working in Birmingham,” Babylon said.

“Babylon GP at Hand are committed to expanding across the country, and [will] work closely with NHS England and local clinical commissioning groups on this.”

One person familiar with the decision said Babylon’s expansion into Birmingham had initially been blocked because NHS England had been worried patients would not have full access to immunisation and screening services if they de-registered with local doctors.

The health system, which is grappling with a shortage of doctors, squeezed resources and rising demand from an ageing population, said last month that it would offer digital consultations to all Britons.

“The NHS will see an increasing use of digital technology and from 2021 every patient in England will have access to online and video consultation — if they choose it,” a health service spokesperson said. “This practice is just one of the ways of providing that.”

Babylon, which is available in parts of London, has been championed by UK health secretary Matt Hancock, who is a customer. But the start-up has faced widespread criticism from some doctors who argue it attracts healthier patients, leaving under-resourced traditional practices to deal with complex cases.

It has also faced regulatory scrutiny over its chatbot, which analyses patients’ symptoms, after doctors said it could miss serious signs of illnesses. The start-up has since made changes to the app.

Paul Jennings, chief executive of Birmingham & Solihull clinical commissioning group, said last July that Babylon’s launch in the city should be blocked until NHS England had conducted a full review.

NHS England commissioned Ipsos Mori, a research group, to carry out an independent review of Babylon’s services last year, but the review is ongoing and not due to be completed until next month.

Babylon is trying to raise about $400m after spending more than $75m last year on a big expansion. It had planned to expand GP at Hand to nine locations in the UK, but was stalled by the block.

Over the past year, the start-up has focused on expanding abroad and striking commercial partnerships, including with Samsung, Tencent and Prudential.

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