Implications of recent UK government announcements on the tech sector

The government continues to prioritise tech policy in the UK with London Tech Week, the Spending Review and AI Summit London all highlighting the important role government expects tech to play in driving economic growth. Here are some reflections on what it may mean: 

SUMMARY

• Both the Spending Review (SR) and London Tech Week had a heavy AI focus, with government committing to making the UK ‘the best place for Tech and AI’.

• This commitment included £2 billion to support the work in the AI Opportunities Action Plan, including the new UK Sovereign AI Unit, and an acknowledgement that more work needs to be done to drive widespread AI adoption and to scale and keep AI companies in the UK. It also included £86 billion in wider funding for R&D accelerator programmes including in AI.

• The government has backed both public sector and private sector AI as a tool for growth. This includes a significant uptake of AI across the NHS and other public sectors to drive productivity and balance the departmental budget cuts. 

• Whilst these announcements are good for the sector, it could be a while until these policies lead to economic growth. The government will also need to balance mass scale up of AI with clean energy commitments, particularly around data centres and infrastructure, as included in the AI Opportunities Action Plan. 

• Government may need to do more work to build public support for AI with London Tech Week discussions pointing to public fears over AI. A global survey published this week suggests that 43% of UK Gen Z workers are worried AI will replace them in the workplace. 

• Other tech policy developments, such as the Data (Use and Access) Bill debate around copyright and AI training, could lead to concerns amongst parliamentarians regarding the rapid adoption of AI leading to less desirable outcomes for society.

Additional reflections on the government’s approach to digital technologies are below.

ON AI:

• The government commitment towards making the UK the best place for AI involves significant investment. The Spending Review committed further funding of £2 billion to support the work in the AI Opportunities Action Plan, including the new UK Sovereign AI Unit. This is a key part of the government’s plans to ensure AI companies grow, scale and remain in the UK following high profile sales of UK AI companies to the US.

• The Sovereign AI Unit will need to be successful if the UK AI sector is to expand and contribute to growth.  However, keeping AI firms in the UK could be challenging due to AI start-ups often relying on a buy-out by a larger tech firm when securing investment. To try and address this, the government has also relaunched a VC fellowship programme to increase the capacity of the UK financial sector to invest in up-and-coming technology.

• Whilst there have been some notable outputs from the AI Opportunities Action Plan, including AI growth zones and other infrastructure commitments such as establishing data centres and new supercomputers, more needs to be done if we are to see the mass adoption and integration of AI across the UK economy.

• The government has acknowledged the importance of employment in growing the AI sector and is looking at skills and visas to ensure the UK can hire and retain talented individuals.

• There are still concerns amongst parliamentarians that the government is committing too fast to AI and has not fully considered the risks. The recent debate around copyright and AI as part of the Data (Use and Access) Bill highlights uncertainty around training methods and whether AI companies are using data in a lawful manner. UK digital regulators are prioritising AI, with the CMA and ICO scrutinising foundation models to understand how they comply with existing legislation.

ON DIGITALISING PUBLIC SERVICES: 

• The government is prioritising investment in digital and AI across public services, including the NHS, with an additional £1.2bn over the SR period to support cross-cutting digital priorities.

• Making data easier to access and share for research or public interest purposes is one of the changes in the Data (Use and Access) Bill and is crucial in helping the public sector develop and fine-tune AI tools and digital technologies that will work effectively. For example, it is currently difficult to share data between NHS Trusts or government departments, limiting the ability to make adaptable AI solutions (as shown by the release of smaller specialist AI tools such as the HMT internal search tool and the consultation tool).

• The Department for Science, Innovation and Technology (DSIT) will oversee this public sector transformation and set out the proposals in a Digital and AI Roadmap later this year. The public transformation is a key part of lowering government spending by automating and reducing the time and resource spent on administrative tasks. The government is likely to expect this to support key priority areas such as NHS waiting lists and access to wider healthcare.