New blueprint for AI regulation could speed up planning approvals, slash NHS waiting times, and drive growth and public trust
Source: gov.uk (2025-10-20)

A new blueprint for AI regulation is being announced by the Technology Secretary today (Tuesday 21 October) to help drive innovation and growth.

- AI Growth Labs will unlock new ways to accelerate innovation and cut bureaucracy in a safe environment
- More new homes, better outcomes for patients, and world-leading innovations for professional services among potential wins for the public
- This new approach to regulation will help drive forward growth and national renewal under the government’s Plan for Change (https://www.gov.uk/missions)
More new homes, better outcomes for patients, and world-leading innovations are among the benefits people can expect to see from a new blueprint for AI regulation being announced today, as the government slashes bureaucracy and ramps up the safe adoption of AI to unlock its full potential.

At the Times Tech Summit today (21 October), the Technology Secretary will announce plans to look at how companies and innovators can test new AI products in real-world conditions, with some rules and regulations temporarily relaxed under strict supervision.

Known as sandboxes, individual regulations are temporarily switched off or tweaked for a limited period of time in safe, controlled testing environments. They would initially be set up for key sectors of the economy like healthcare, professional services, transport, and the use of robotics in advanced manufacturing, to accelerate the responsible development and deployment of AI products.

The announcement comes as the Chancellor also details progress made towards delivering on the government’s vision for a regulatory system that better supports growth and innovation. At today’s Regional Investment Summit, the Chancellor will announce a range of pro-growth reforms that will help deliver that vision set out March’s Regulation Action Plan (https://www.gov.uk/government/publications/a-new-approach-to-ensure-regulators-and-regulation-support-growth), including a plan to save businesses across the country nearly £6 billion a year by 2029 by cracking down on pointless admin tasks.

AI applications hold the potential to make the lives of citizens better, faster. The AI Growth Lab will pilot responsible AI which can otherwise be held back by certain regulation, and generate real-world evidence for the impact they can deliver. This will ramp up adoption of AI and deliver opportunities for people across the country, cutting bureaucracy that can choke innovation and supporting businesses to flourish to deliver tangible national renewal.

For example, a testing ground focused on building AI tools could support health workers deliver better patient care on an accelerated timeline. This would also help reduce NHS waiting lists and time demands on frontline NHS staff, as well as ensure that public services are working around the lives of the British public.

Currently, a typical housing development application racks up 4,000 pages of documentation and takes as long as 18 months from submission to approval. By reviewing regulations to explore how AI could support officials, those times could be slashed – speeding up decision making and putting the government’s plans to build 1.5 million new homes by the end of the current Parliament in the fast lane.

Close working between businesses and regulators are already delivering transformations for the public. A sandbox led by the Information Commissioner’s Office has supported age verification company Yoti to fine tune their age estimation technology to help keep young people safe online, while another trial has helped FlyingBinary to develop online services which support mental health patients.

Technology Secretary Liz Kendall said:

To deliver national renewal, we need to overhaul the old approaches which have stifled enterprise and held back our innovators.

We want to remove the needless red tape that slows progress so we can drive growth and modernise the public services people rely on every day.

This isn’t about cutting corners – it’s about fast-tracking responsible innovations that will improve lives and deliver real benefits.

In a further push to unlock benefits for the wider public through AI, a pot of £1 million is being set aside to support the Medicines and Healthcare products Regulatory Agency (MHRA) to pilot AI-assisted tools. These would support scientific expertise, speed up drug discovery and clinical trial assessments, and licensing to improve efficiency and consistency – while keeping all decisions firmly in human hands.

The continued safe and responsible development of AI would be central to the government’s plans for its proposed AI Growth Lab. It would not be a testing ground where regulations could be switched on or switched off at will, but would see strict, time limited restrictions being put in place to set out which specific regulatory hurdles could be avoided or modified under close supervision.

It will be overseen by tech and regulatory experts and backed up by a strict licensing scheme with strong safeguards, meaning any breaches of individual agreements, or the emergence of unacceptable risks would stop testing in its tracks and open users who have breached their terms up to potential fines.

While this would mark new ground in terms of AI, other regulatory testing grounds have already been put to effective use across the economy.

The Digital Securities Sandbox for example is helping finance firms and innovators by giving them the ability to test innovative tech solutions for some of the most urgent challenges in the financial sector. It is helping to deliver a more secure and efficient financial system by focusing on Distributed Ledger Technology, which creates a single bank of data on financial transactions to speed up efficiencies and help tackle fraud.

Internationally, countries are already using sandboxes to speed safe deployment. Jurisdictions such as the EU, USA, Japan, Estonia and Singapore have announced or implemented some form of regulatory sandbox for AI. The UK pioneered the global sandbox model with the launch of the FCA’s 2016 fintech sandbox - with transformative AI approaching, the UK must stay at the vanguard of international best practice in regulatory innovation – and the benefits this brings for UK innovation and jobs.

The government will now move ahead with a public call for views on its AI Growth Lab proposals (https://www.gov.uk/government/calls-for-evidence/ai-growth-lab). At the heart of that process will be considerations over whether the programme should be run in-house by the government, or overseen by regulators themselves.

The adoption of AI is the defining economic opportunity of the coming decade, but currently only 21% of UK firms are using the technology. The OECD currently estimates that AI could improve UK productivity by as much as 1.3 percentage points every year – worth the equivalent of £140 billion. The AI Growth Lab will provide a route to test and pilot responsible AI innovations hindered by regulation – driving AI adoption and economic growth.

Further Information

Exclusions from the sandbox would include consumer protection and safety provisions, fundamental rights, workers’ protections and intellectual property rights.

Industry and stakeholder reaction

David Wakeling, Head of AI, A&O Shearman, said:

This call for evidence contemplates an agile approach to regulation, removing red-tape where it serves no purpose and breaking down silos between regulators. These steps will be crucial for UK businesses, investors and capital providers to stay globally competitive in the AI race.

Leo Ringer, Partner, Form Ventures, said:

This is a strong signal of ambition to ensure the UK is a world leading place to start and scale an AI business. Existing regulatory frameworks weren’t created with AI in mind, and the sheer pace of tech progress means it’s no surprise that they risk slowing down innovation and adoption.

We have incredible talent and growing amounts of capital for AI startups in the UK - flexible, pro-innovation regulation is the third ingredient we need to really unlock investment and growth.

Luther Lowe, Head of Public Policy, Y Combinator, said:

The AI Growth Lab addresses a critical challenge: enabling AI startups to launch innovative products without waiting years for regulatory clarity.

For Y Combinator companies, faster time to market matters—and if the Lab delivers on its promise while maintaining appropriate oversight, it sets a strong model for how governments can keep pace with AI innovation.

Paul Murphy, General Partner at Lightspeed Venture Partners, said:

As investors in many of the world’s leading AI labs, we know regulatory speed impacts where breakthrough companies scale. The UK can be a major player in this race with fast, fair, and globally competitive sandbox access.

Vinous Ali, Deputy Executive Director at Start-Up Coalition:

Startup Coalition has long campaigned for a cross-economy sandbox to help speed up startups’ route to market. The UK has historic strengths in sandboxing and this latest proposal takes it into the future helping bring regulators and businesses together to collaborate in a nimble and open way.

It is great to see government take a leaf out of the startup manual by adjusting their risk appetite to win the race.

Vishal Marria, Founder and CEO, Quantexa, said:

The UK has an incredible foundation in AI research and innovation, and to truly unlock its economic and societal potential, we need to accelerate how ideas are turned into reality to make tangible impact. An AI Growth Lab has the potential to provide the bridge between world-class research and real-world application, helping organizations of all sizes adopt AI responsibly, confidently, and at scale.

By combining trusted data, contextual understanding, and collaboration across industry, academia, and government as part of its broader set of strategic AI initiatives, the UK will continue to position itself as a world leader in turning AI from promise into performance.

Antony Walker, Deputy CEO at TechUK, said:

TechUK welcomes the launch of AI Growth Lab, which represents a strong, positive step towards a pro-growth regulatory approach that will help companies to safely develop, scale, and deploy AI in key sectors of the UK economy.

If we get this right, the AI Growth Lab can add real value by drawing on learnings from existing AI sandboxes and working closely with AI businesses to deliver tangible results and deliver real-world impact.

Finn Stevenson, CEO at Flok Heathcare, said:

The potential for AI to transform healthcare is enormously exciting, but good regulation is required to ensure that these novel technologies are safe and effective for patients. As we’ve shown with our Class IIa medical device clearance for AI physiotherapy, it is absolutely possible to certify products like this, but many more innovations could get to market faster if the rules were modernised for a software-driven world.

Regulators like the MHRA, and the notified bodies that assess AI products on their behalf, currently have the unenviable task of applying rules designed for physical products to advanced software systems that are radically different than anything that existed when the regulations were written. In revisiting those regulations, the AI Growth Lab is a valuable opportunity to make the UK a global destination for healthcare AI.

Dr Hammad Jeilani, Medical Director and Co-Founder, Apian, said:

Apian is helping the NHS focus on what matters most: humans caring for humans.

Our AI-powered autonomous robots increase productivity and cut costs - handling routine logistics so healthcare staff can dedicate more time to patient care. A cross-economy sandbox will let innovators like Apian safely test and scale these systems, making NHS logistics invisible, resilient and truly patient-centred.

Rafie Faruq, Co-Founder & CEO at Genie, said:

Genie has built the autonomous legal department for businesses by enabling them to create their personalised legal agents that can auto-draft, negotiate and review legal documents and deals. In one recent case, Cambridge Utd Football Club signed the first ever football player through Genie AI without a lawyer. But providing AI-generated legal advice, particularly for regulated legal areas like securities, employment, or housing - may constitute unauthorised practice of law.

The AI Growth Lab would allow Genie to trial an autonomous legal agent in live commercial environments. We believe this sandbox could be transformative - both in reducing startup costs and helping UK businesses scale faster through AI-enabled contracting.

Andrew Bennett, Centre for British Progress, said:

Britain must move quickly to grow and secure our stake in the next industrial revolution. Yet too often, economic opportunities and British startups are held back by regulatory bottlenecks.

The AI Growth Lab can provide a safe, accelerated pathway for using AI to deliver better outcomes across the country.

Karl Havard, Chief Commercial Officer, Nscale, said:

Nscale is super supportive of the AI Growth Labs. The creation of safe sandbox environments will be a much needed catalyst to develop and test new products and services that will directly benefit the people of the UK.

It’s great to see the UK government leading the way on such an initiative, and Nscale is looking forward to playing a supporting role in making this a reality.

Nigel Toon, Graphcore founder, said:

Graphcore welcomes the launch of the AI Growth Lab as a means of encouraging innovators to push the boundaries of this transformative technology.

We hope that the UK’s forward-looking approach to AI will drive AI adoption and deliver the same sort of success stories that the financial technology regulatory sandbox did in the past.

Michael Sellitto, Head of Global Affairs, Anthropic, said:

We are really encouraged the UK government is looking in this direction, to create space for experimentation and promote innovation.

Hugh Milward, Vice President External Affairs, Microsoft, said:

Widespread AI diffusion across the economy is fundamental to delivering the UK’s economic growth ambition and we welcome the government’s continued progress on the AI Opportunities Plan towards this goal.

The AI Growth Lab is an interesting and creative initiative to provide the flexible regulatory approach that will support faster UK AI innovation and we look forward to hearing more.

Matthew Wright, Head of U.K., Delian Alliance Industries, said:

AI and autonomous systems will be integral to the future of defence and civil protection, but startups leveraging these technologies face considerable regulatory barriers today.

We therefore welcome the AI Growth Lab’s ambition to minimise these hurdles. In doing so, the Lab will help such startups to drive economic growth while enhancing national security.

Dr. Tim Bazalgette, Chief AI Officer at Darktrace, said:

Darktrace welcomes the government’s ambition for monitored AI sandboxes.

Allowing innovators to test transformative applications of AI in safe conditions and demonstrate that they have genuine real-world value will help to accelerate the deployment of effective AI solutions across critical areas of the British economy, supporting the public good and driving growth.

Jon J. Paull, COO, Octopus Energy Group, said:

At Octopus, we’ve shown how responsible AI can supercharge innovation, from forecasting renewable generation to transforming customer service.

Outdated rules can too often slow progress so we welcome government’s proposal for an AI Growth Lab, a safe, collaborative space where UK innovators and regulators can test responsibly, and evolve the frameworks that govern new technology.

Aidan Gomez, Co-Founder and CEO, Cohere, said:

Today’s announcement will accelerate the speed that AI can improve people’s lives, especially in critical, regulated areas like healthcare.

The UK government’s leadership on policies that enable quick, but responsible, development and deployment of transformative, cutting edge technology is why Cohere has consistently invested in the country since our founding.

Nik Storonsky, CEO and Co-Founder, Revolut, said:

>Accelerating AI adoption is critical for the UK banking sector and the entire economy. This initiative will give innovators like Revolut the clarity and speed we need to build and deploy groundbreaking AI services, reinforcing the UK’s leadership and delivering real value to millions of customers.

Dr Marc Warner, CEO and founder, Faculty AI said:

The UK AI sector is growing 30 times faster than the rest of the economy and has world-leading companies - yet there are no guarantees the next DeepMind will found and grow here.

If ministers want more domestic AI success stories, they must make conscious choices today about how they support our start ups and scale ups.

Removing red tape to allow safe testing and iterating of AI products is a welcome step in backing the sector to build the faster, cheaper, more efficient public services we need.

Max Jamilly, co-founder and CEO, Hoxton Farms, said:

At Hoxton Farms, we’ve seen both sides of the innovation equation. Our AI-enabled control software for manufacturing biologic medicines is held back by outdated AI rules, yet our positive experience in the FSA’s Cell Cultivated Products Sandbox for Novel Foods shows that forward-thinking regulation can unlock markets and accelerate new technology.

Sandboxes work: they enable fast, efficient collaboration between innovators and policymakers while minimising risk. Pragmatic and efficient rules for AI will help to turn UK start-ups into global leaders.

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