The UK government has said it will take a “start up mindset” with a “test and learn” approach to new technology and digital transformation funding after a review said a new approach was needed to ensure the success of spending on new digital services.
Following a digital spend "Performance Review” HM Treasury (HMT) and the Government Digital Service (GDS) said they will adopt four new funding models to “deliver value for money for the taxpayer”.
The new funding paths will include “staged funding” for innovative technologies and live services, outcome-based funding tied to programme outcomes, and one establishing “a tech and cyber risk appetite” across departments.
See also: Unwiring Whitehall? Why HMG is facing a CIO exodus
Technology Secretary Peter Kyle claimed changes would “ensure innovation is the default” and said: “This review will help us build technology that will mean businesses can skip the admin and get on with driving growth.”
The review, commissioned by the Chief Secretary to the Treasury in August 2024, called for a “significant shift in how digital initiatives are funded” and said short term savings are often given weight over spending on maintenance and improvements.
Its publication comes shortly after a State of Digital Government report claimed £45 billion could be saved by the public sector through IT transformation.
See also: HMG sees “£45 billion jackpot” if it gets IT right - blasts reliance on consultants, “archaic” systems
According to the report, the review was led by a “steering group of senior officials” from departments such as HMT, GDS and DSIT, and informed by public sector stakeholders and external consultants.
Drawing inspiration from foreign government projects and the UK’s private sector, such as Lloyds Banking Group’s digital transformation, the review team said an increase in DDaT training should also be a priority.
It said: “Enhanced training and technical support will empower departments and Spending Teams to prepare stronger, leaner, and data-driven business case.”
The training point is one echoed in industry responses to the review, including that of Michael Adjei, Director of Systems Engineering at cybersecurity company Illumio, who said future planning would be the success or failure of the new plans when it comes to AI.
He said: “The UK must define its own AI path and focus not just on speeding up funding but also investing in talent and regulatory frameworks to make these projects truly sustainable.
“Simply throwing money at AI experiments isn’t enough. The UK needs a clear strategy which improves AI education and apprenticeships to build an AI-ready workforce.”
