sdecoret - stock.adobe.comNewsGoverment overhauls AI funding to drive agilityA startup mindset is at the heart of a Labours approach to how it wants to speed up AI innovation in the public sectorByCliff Saran,Managing EditorPublished: 10 Mar 2025 12:14 To tie in the TechUK Tech Policy conference, the government said it plans to overhaul how artificial intelligence (AI) experiments and digital projects are funded in the public sector. The Department for Science, Innovation and Technology (DSIT) wants to cut down waste in taxpayer funding, boost efficiency through innovation, and to improve services for the public to deliver on Labours Plan for Change.The review into funding aims to stop public sectors technology money being spent on projects that fail to deliver intended outcomes for the public. The overhaul in funding 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the Plan for Change.The blueprint revealed that one in four of the digital systems used by central government are outdated. For the worst affected organisations, this figure is almost triple (70%).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 But a decades-old process has encouraged short-sighted thinking and outdated tech, while stopping crucial innovation before it even gets going.These changes were making ensure innovation is the default.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.Following publication of the funding review, which reported that many digital projects face overly complex spending approval processes, among the changes the government is putting in place is what DSIT describes as a startup mindset, which it said will offer a route to simplify how government funds small AI projects.The government plans to put in place four new approaches to funding innovation that it will start testing from April. These approaches build on the success of Gov.uk Chat, the governments experimental generative AI chatbot, to provide staged funding for innovation. The government said it will focus on developing new outcome metrics and evaluation plans for major digital projects to ensure that these deliver value for money for the taxpayer.DSIT hopes that a more agile funding process will speed up building and testing of initial prototypes. If early trials of a project show the potential to save money and improve public services for citizens, the government plans to increase support through larger tests.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.As the government continues to work out the best route to support UK tech innovation and make use of such innovation to improve digital services across the public sector, a study for TechUK reported that the tech sector has a broadly positive view of the UK government twice as many tech businesses think the new Labour government has performed well (52%) than poorly (23%). However, a third of small and mid-side businesses polled believe the government is performing poorly. The poll of 250 businesses reported that issues such as high implementation costs (41%), the complexity of new technologies (37%), and energy costs associated with new technology (34%) were the major barriers that tech sector customers face.Read more digital government articlesDelivering digital government its (still) not about technology: One of the UK governments most senior digital leaders reveals the flaws and difficulties of delivering digital transformation across the civil service.Everything, everywhere, all at once automated decision-making in public services: Despite the UK governments fervent embrace of artificial intelligence, there is still little meaningful transparency around the scope of the technologys deployment throughout public services.In The Current Issue:DeepSeek-R1: Budgeting challenges for on-premise deploymentsInterview: Why Samsung put a UK startup centre stageDownload Current IssueSLM series - OurCrowd: Are domain-specific LLMs just as good (or better)? CW Developer NetworkSUSE Edge for Telco 3.2 dials into disaggregated network architectures Open Source InsiderView All Blogs