The government is revamping how it funds AI projects and digital initiatives in the public sector. The Department for Science, Innovation and Technology (DSIT) aims to eliminate waste in taxpayer money, enhance efficiency, and improve public services in line with Labour’s Plan for Change.
This review addresses the unfortunate reality that a lot of public sector tech funding goes towards projects that don’t meet the needs of citizens. Recently, a blueprint for a modern digital government was released, outlining the role of technology in improving services and driving growth. It pointed out a concerning statistic: one in four digital systems used by central government is outdated, and in some organizations, that percentage jumps to 70%.
Technology Secretary Peter Kyle emphasized the need for change, stating that the existing processes have stifled innovation and led to outdated technology. He believes technology has the potential to create effective public services and that these changes will foster an environment where innovation thrives. Government will now give AI innovators the freedom to explore ideas and build prototypes right away.
The funding review highlighted that many digital projects get bogged down by complicated approval processes. To address this, DSIT is adopting what they call a “startup mindset” to simplify funding for smaller AI projects. Starting in April, the government will test four new funding approaches, inspired by the success of Gov.uk Chat, their experimental AI chatbot. These methods will include staged funding to ensure that taxpayer money provides real value.
The goal is to create a more agile process that speeds up the development and testing of prototypes. If initial tests show promise for saving money and enhancing public services, funding will be expanded for larger trials.
Chief Secretary to the Treasury Darren Jones reinforced the government’s commitment to digital transformation, insisting that it must lead to better outcomes for citizens and ensure taxpayer money is spent wisely.
While the government works on supporting UK tech innovation, a study for TechUK shows that the tech sector generally views the government positively—with more businesses believing the new Labour government is performing well (52%) rather than poorly (23%). However, a third of small and mid-sized businesses feel the government is falling short. Key challenges for the tech sector include high implementation costs (41%), the complexity of new technologies (37%), and rising energy costs linked to new tech (34%).