Government to take a ‘test and learn’ approach with spending on AI and digital to push innovation
Source: gov.uk (2025-03-10)

Government overhauls funding for AI and Digital Projects to save taxpayer money and boost public services

- New approach brings in a start-up mindset to testing the application and use of AI experiments on small budgets, and then building on proof of success.
- Review reveals that current funding processes are too complex for many digital projects and experimental technologies like AI, delaying decision-making and innovation.
- Changes to help get new innovative digital tools off the ground to deliver the Government’s Plan for Change, supporting businesses to grow, NHS to see patients more quickly, and police to tackle crime.
How AI experiments and digital projects are funded in the public sector will be overhauled and simplified to cut down waste in taxpayer funding, boost efficiency through innovation, and improve services for the public to deliver our Plan for Change.

Embedding a ‘start up’ mindset, the change will offer a route to simplify how Government funds small AI projects and the replacement of outdated technology, after a review found that many digital projects face overly complex spending approval processes that can slow them down or prevent them from getting off the ground entirely.

Four new approaches to putting money behind innovation will be tested from April. This includes building on the success of GOV.UK (https://eur02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fgov.uk%2F&data=05%7C02%7CRamyaa.Mohan%40dsit.gov.uk%7Cfa0a9494e8634e353be308dd5e30f888%7Ccbac700502c143ebb497e6492d1b2dd8%7C0%7C0%7C638770286607914845%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=4SICrMJWgwI3JwUVZaV94gD9hvm%2BQF7NPMF2YW51y%2Bc%3D&reserved=0) Chat, the government’s experimental generative AI chatbot, to provide “staged funding” for innovation.

It will see bright ideas supported by more agile funding processes, to build and test an initial prototype more quickly. Progressing in stages, projects will be supported through larger and larger tests if early trials show the potential to save money and improve public services for citizens.

There will also be a strong focus on developing new outcome metrics and evaluation plans for major digital projects, to ensure that that these deliver value for money for the taxpayer.

The review aims to stop chunks of the public sector’s technology bill not delivering on intended outcomes for the public. It follows the publication of a “blueprint for a modern digital government”, which set out how technology will be used to improve public services, drive growth and deliver the Plan for Change.

Ahead of a speech to announce the reforms at techUK, alongside a suite of other measures to use technology to drive growth, Technology Secretary Peter Kyle said:

Technology has immense potential to build public services that work for citizens. But a decades old process has encouraged short-sighted thinking and outdated tech, while stopping crucial innovation before it even gets going.

These changes we’re making ensure innovation is the default. We will help give AI innovators in Government the freedom they need to chase an exciting idea and build prototypes almost immediately.

This review will help us build technology that will mean businesses can skip the admin and get on with driving growth, digital systems supporting the police are more reliable so they can keep our streets safe, and it will mean we can build new tools to speed up wait times for doctors’ appointments and get the NHS back on its feet are built.

Chief Secretary to the Treasury, Darren Jones, said:

This Government is determined that digital transformation of the state and our public services will deliver better outcomes for people, and ensure every pound of taxpayers money is spent well.

Today’s review follows research revealing that one-in-four of the digital systems used by central government are outdated. For the worst affected organisations, this figure is almost triple that (70%). This outdated technology can rack up huge maintenance costs, ultimately resulting in the taxpayer paying out three-to-four times more than if the technology was kept up to date. A growing number of these outdated systems are “red-rated” for reliability and security risk.