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The government has announced it will abolish NHS England (NHSE) as part of its plans to reform the British State, cut bureaucracy, and shift money to the front line. The move, which was announced by Prime Minister Keir Starmer and then expanded upon by Health Secretary Wes Streeting, will see management of the NHS in England brought back under direct departmental control, a move that will have major implications for the UK's health technology sector.
Streeting said the decision to abolish NHS England was taken because the government did not believe it was possible to achieve value for taxpayers’ money and get the best out of the NHS with the current setup. He quoted the Darzi Review, which said the Health and Social Care Act of 2012 (which led to the creation of NHS England) was “a calamity without international precedent”, creating a complex and fragmented web of bureaucracy. By bringing the NHS in England back under direct departmental control, the government intends to strip out duplication, create a leaner organisation, and provide a clarity of focus.
The announcements made it clear that digital transformation sits at the heart of this reform and the government’s plans to deliver the three big shifts in the NHS: from hospital to community, sickness to prevention, and analogue to digital. Starmer said he saw AI as a “golden opportunity” and that he was going to get “the best of best on AI working across government” and set every government department with a clear mission to make the state more innovative and efficient.
In this HotViewsExtra article we look at the key announcements, the impact they will have on the NHS, and implications for tech suppliers to the health sector.
TechMarketView subscribers, including UKHotViews Premium subscribers, can read ‘Tech implications of abolishing NHS England’ here. If you aren't a subscriber—or aren't sure if your organisation has a corporate subscription—please contact Belinda Tewson to find out more.
Posted by: Dale Peters at 10:18
Tags: nhs strategy health policy government healthcare reform quango DHSC
Kyndryl has signed a five-year extension to its contract with tyre and car maintenance firm, Euromaster.
Kyndryl will host and manage Euromaster’s on-premises workloads in its private cloud, which is housed in its data centre in Montpellier, south of France. Kyndryl will also provide managed services for workloads that are hosted on Azure.
Renewals and extensions are a really important aspect of Kyndryl’s evolution since the spin out from IBM. It’s been going through a process of weeding out deals that are low margin – which has inevitably hit the top line but improved profits.
Other recent deal signings include Defra and Co-operative Bank.
Euromaster is a subsidiary of tyre manufacturer, Michelin. In the UK, it operates as ATS Euromaster, which is set to close 86 branches putting 400 jobs at risk – according to media reports.
Posted by: Kate Hanaghan at 10:00
Tags: contract privatecloud
I was delighted to see that ShareDo has been acquired by Clio, the Canada-based supplier of cloud-based legal technology.
ShareDo started life as Slicedbread, which was founded in 2011. Back then it was a Microsoft-based service business providing bespoke software to corporate clients. In 2014, product development on ShareDo started, with a focus on the legal sector. Indeed, ShareDo was the first new entrant into the legal case management market for over 20 years. In 2016, the firm transitioned from being a services-led firm to a product company.
I have a very personal interest in this as, via my involvement as a Limited Partner (LP) at Regent Park Partners II, we acquired a stake back in 2018. I can’t disclose the consideration, but I/we made c.12x on our investment.
Back in 1999, I became a LP in Elderstreet and have written many times of how that lead to serial investments in Vin Murria’s companies and others like Kimble. Barnaby Terry was a Partner at Elderstreet Investments and, when he left, got involved with Sussex Place Ventures and in 2014 invited me to invest into the Regent Park Partners 11 fund as an LP.
So far it has proved to be a very ‘rewarding’ association with excellent exits from the likes of Legerity, LaunchPad, Data Tiger, Kimble (Kantata), and Endomagnetics. Of course, out of 17 investments we’ve had our failures too! But the successes many times outweigh the failures. Although the fund will do no more new investments, we still have a number that are expected to provide a good return in the year ahead.
The fund is part of the Enterprise Capital Fund programme and backed by the British Business Bank, so it’s good to see government initiatives like this really pay off!
ShareDo has really performed well, growing rapidly without the need for extra cash – oh how I like companies like that!
Posted by: Richard Holway at 10:00
Tags: acquisition
Serial buyer of vertical software businesses, Software Circle plc has purchased driving instructor solution provider, Total Drive Software Limited for up to £7.5m. The all cash deal, funded from the AIM-listed company’s new £10m drawdown facility arrange with Shawbrook Bank (see here), comprises an initial consideration of £3.5m, a deferred payment of £1m twelve months after completion and an earn-out based on future financial performance of a possible further £3m. The acquisition is expected to be cash flow generative and earnings enhancing in the first year.
Founded in 2020, Devon-based Total Drive has become the UK's leading driving instructor app used by some 6,000 individuals weekly. Around 80% of revenues, which have reached an annual run rate of c.£1.1m, arise from annual recurring subscription fees with the remainder from payment processing and training aids and materials. The valuation of the company has been based on an expected EBIT of £700k.
The latest acquisition is the third to be made by Software Circle in the current financial year which ends on 31st March. It follows the addition of financial services marketing focused Bethebrand in May and children's social care specialist Link Maker Systems two months later (see here) to the company’s portfolio of brands. Despite an underlying organic top line decline, and before the Total Drive buy, Software Circle was expecting to exit FY24/25 with an annualised revenue run rate of c.£20m, up 20% yoy, and an adjusted EBITDA margin of above 15% for the year.
Posted by: Duncan Aitchison at 09:13
Tags: acquisition saas software
TechMarketView wants to hear again from UKHotViews readers about how you view the current state of the UK tech scene.
Last September, TechMarketView launched the results of its inaugural Tech Confidence Index (TCI) (Autumn 2024 edition), a six-monthly survey acting as a bellwether for the state and prospects of the UK tech sector. This first edition of TCI included the results from more than 250 business leaders serving all major Software & IT Services (SITS) sectors and end user industries.
Last week, we commenced the second edition of the TCI survey (Spring 2025 edition) continuing to track the confidence of the UK tech scene to help both SITS suppliers and end users understand market sentiment whilst planning and preparing for the period ahead. The report is also available to download to all who are interested without the need to have a TechMarketView subscription in place.
One of TechMarketView’s biggest strengths remains our ‘community’ of more than 20,000 technology industry professionals who read the daily UKHotViews newsletter. In the past, we have gauged opinions via our extensive conversations with CXOs within the industry. However, we would like to make sure we are casting the net wider and ‘taking the temperature’ of the UK tech market in a more consistent way, enabling us to monitor changes over time. As such, we would really appreciate your input by clicking on the link below and sharing your opinion with us.
Please share a few minutes of your time, as the quality of the data will depend on the number and variety of the responses we gather.
PLEASE CLICK HERE TO COMPLETE SHORT SURVEY
Posted by: Marc Hardwick at 08:37
Alongside its Q4/FY results out earlier this week (see UiPath stock falls on troubling signs despite profit beat) automation software vendor UiPath also announced the acquisition of Manchester-headquartered AI company Peak as the RPA vendor pivots toward industry-specific AI applications.
This deal should help strengthen UiPath's vertical AI solutions by incorporating Peak's purpose-built AI decisioning platform, which currently specialises in areas such as inventory management and pricing for retail and manufacturing businesses. Peak has already demonstrated value through deployments with major clients like Nike and Molson Coors.
The acquisition brings some obvious benefits to UiPath including immediate entry into vertical-specific AI agents, starting with Pricing and Inventory Agents. The deal should also add decision intelligence capabilities to UiPath's agentic automation platform and proven AI tech that doesn't require large in-house tech teams. The firms already have an existing partnership which appears to be showing promise, notably in automating pricing quotes for Heidelberg Materials, with improved efficiency and conversion rates.
For UiPath, this acquisition represents what looks like a sensible bet on specialised, vertical-oriented AI applications as the next growth frontier beyond general automation. However, with Peak having raised $119m previously (including SoftBank Vision Fund backing), questions remain about acquisition costs and integration challenges.
Posted by: Marc Hardwick at 08:32
Tags: acquisition software
Adobe kicked off FY25 with a strong first quarter, reporting record-breaking revenues of $5.71bn, up 11% yoy. CEO Shantanu Narayen reaffirmed the company’s bullish outlook for fiscal 2025 ahead of its flagship Adobe Summit, underscoring the impact of AI-driven innovation across its product ecosystem.
The company’s Creative Cloud and Document Cloud businesses continue to show robust performance, with significant adoption of new AI-powered offerings such as Firefly Services. The digital media segment posted revenues of $4.23bn, marking a 12.6% increase in annual recurring revenue (ARR) to $17.63bn. Meanwhile, the digital experience business generated $1.41bn of revenue, with subscriptions climbing 11% yoy.
AI remains at the core of Adobe’s strategy, with the company embedding its Firefly GenAI models across its Creative Cloud, Document Cloud, and Experience Cloud platforms. The recently launched Firefly app serves as a central hub for AI-driven content generation, spanning images, vectors, and video. A highlight of Q1 was the launch of the Firefly video model in February - a commercially safe GenAI tool enabling users to create video clips from text prompts, adjust camera angles, and generate 3D sketches. The technology is already being leveraged by industry giants such as Dentsu, PepsiCo, and Stagwell.
Adobe's AI-led stand-alone and add-on products such as Acrobat AI Assistant, Firefly App and Services, and GenStudio for Performance Marketing, have already contributed greater than $125m book of business exiting Q1. Abobe expects this to double by the end of fiscal '25.
AI is set to become central to the creative industry, with a range of GenAI tools being utilised to create content from marketing collateral to videos quicker and cheaper. Adobe looks set to capitalise on this generational shift, cementing its dominance in the creative tech space.
Posted by: Simon Baxter at 09:57
Coming just a couple of months after ICS.AI announced the appointment of a Chief Local Government Officer, with a pivotal role to help councils focus on challenges with best AI affinity, the company has announced a partnership with Hillingdon Council (one of London’s 32 borough councils) to implement a comprehensive AI-powered customer service platform to similarly transform how its residents interact with council services.
The contract, worth £1m over two years, will see ICS.AI integrate its local government-focused SMART: Customer Service Copilot – based on Microsoft AI technology – with the council’s existing telephony system (to provide a voice-based conversational interface), and with its public website (to provide helpful articles and self-service capabilities). The solution will introduce a 24/7 service in multiple languages – providing answers to queries on areas as diverse as waste management, parking permits, and housing – with SMS functionality that enables the voice assistant to deliver additional information to residents via text message.
The project is partially intended to bring cost savings and free up council staff time to focus on more complex issues, but it’s also part of Hillingdon’s wider ambition to “transform and redesign the council’s services” as part of its “Digital Strategy” vision.
As part of Hillingdon’s wider AI Transformation Programme with ICS.AI, it’s also looking at other potential use cases for the technology, council-wide (with key service areas like Adult Social Care, Children's Services, Customer Services, and Income Management in its sights).
The council is no stranger to AI – an earlier project with PwC saw it deploy an Amazon Connect-powered AI voice and web chat solution in 2022 (PwC will feature in TechMarketView’s upcoming Market Readiness Index report, The Road to AI – Part 2, which maps the AI readiness of the next wave of the UK’s leading IT services providers).
This new ICS.AI initiative clearly builds on that earlier work, with LLM tech having moved on considerably over the last three years. The council's shift to Microsoft likely stems from a combination of factors: wanting to explore diverse AI solutions that leverage the unique capabilities of each platform, and deploying solutions that best align with the rest of its IT estate. Microsoft's AI tech has built-in multilingual support, integrates well with any Microsoft back-office systems, and is Azure-based, which is significant as Hillingdon council partnered with Agilisys to migrate the majority of its server estate to Microsoft Azure in 2022.
Posted by: Craig Wentworth at 09:56
Tags: contract contact centre copilot
Alfa Financial Software made significant progress in 2024 (financial year ended 31st December 2024), ending the year with solid revenue growth and record total contract value (TCV).
The London-headquartered business, which specialises in software for global asset finance and leasing industries, reported total revenues up 8% year-on-year to £109.9m (2023: £102.0m), with subscription revenues up 18% to £37.5m (2023: £31.8m). Operating profit increased by 14% to £34.3m (2023: £30.1m) and profit before tax jumped 15% to £34.1m (2023: £29.6m). It achieved TCV of £221.3m, up 34% from the previous year, due to the conversion of a record eight customers during the period.
Alfa has been transitioning away from selling perpetual licences and has now moved to a SaaS only sales strategy. Subscription revenues have more than doubled since 2019, accounting for 34% of total revenues during the year (up from 31% in 2023). At £55.0m, Delivery (previously known as Services) revenue still accounts for the largest proportion of total revenue (50%). Delivery revenue was up 1% to £55.0m (2023: £54.6m), but stronger growth is expected in 2025, with Delivery TCV up 90% to £40.3m (2023: £21.2m). Software Engineering (previously known as Software) revenue was up 12% on the previous year to £17.4m (2023: £15.6m).
Alfa has also improved the diversification of its customer base, helping to improve the resilience of the business. During the year, its top five customers accounted for 32% of total revenue, compared to 61% five years ago. Its largest single customer now accounts for 7% of revenue, down from 20% in 2019.
The company invested £37.1m in product development in 2024 and successfully launched its Alfa Systems 6 platform during the year, representing a major product milestone (see Alfa looks to the future with optimism).
With strong conversion rates, a record level of TCV and recurring revenue now representing 79% of total revenue, Alfa has entered 2025 with confidence. Management expects “mid-teens growth” in Subscription revenues, alongside strong momentum in Delivery and Software Engineering revenues. The company appears well-positioned to capitalise on growing demand for cloud-based fintech solutions in the asset finance sector.
Posted by: Dale Peters at 09:51
Tags: results saas software FinTech financial asset management
As anticipated in our coverage of its FY24 results (see here), flexible workspace SaaS platform provider, essensys plc saw its bottom line move back into positive territory during H125. The simplification of the company’s operational structure and the removal of c.£9m from its annualised expenses made in the prior fiscal have paid dividends. Adjusted EBITDA for the six months ended 31st January improved by 278% yoy to £800k (H124: -£500K).
Turnover, conversely, remained on a downward trajectory. The previously reported decision last by essensys’s largest customer to move to a dual-vendor solution (see here) dragged first half sales down by 9% yoy at constant currency to £10.6m. More encouragingly, however, the period saw the company’s annual recurring revenue (ARR) from its other strategic clients (those with the potential to generate ARR of £1+m) improve by 5% over H124.
Despite the continuing macroeconomic challenges, essensys is confident that further progress will be made during the second half of the current fiscal. Guidance regarding both full year revenue and exit run-rate cash generation is unchanged. The former is expected to benefit from the recent launch of elumo, a new dynamic bookings and access platform. The projection for FY25 EBITDA has, however, been trimmed with the H2 number expected to be similar to the first half figure. This is due to an extension for the company’s data centre decommissioning programme in order to maximise commercial returns.
The publication of the H125 results was accompanied by the announcement that company founder and CEO for the last 19 years, Mark Furness is to step away from the helm and move to a new role as a non-executive director of essensys with effect from 1st May 2025. He will be succeeded by the current Chief Operating Officer, James Lowery. James joined essensys in February 2022 as CEO, UK & Europe and was promoted to COO twelve months ago. Previously, he co-founded and scaled British Land's Storey, a leading flexible office brand.
The headwinds faced by the global office sector, however, look set to remain strong for the foreseeable future. Navigating essensy’s return to long-term, sustainable profitability and cash generation will be neither a quick nor an easy task for the incoming CEO.
Posted by: Duncan Aitchison at 09:38
Tags: results saas PropTech
CGI has announced pricing for a US$650 million senior unsecured notes offering, set to close around 14th March. The 5-year notes will bear interest at 4.95%, however, a concurrent currency swap agreement is expected to reduce the effective Canadian dollar borrowing cost to 3.7125% - reflecting strong market confidence in CGI's financial health.
The company intends to use the c.US$641.3 million of net proceeds primarily to refinance existing debt (likely that maturing in the near-term) and for "general corporate purposes" - language that often signals potential acquisition activities. This aligns with comments from CGI’s new CEO, François Boulanger, at the time of the FY24 results announcement in September (see CGI FY24: financial strength to be active consolidator | TechMarketView). He highlighted that “increasing revenue growth, sustained earnings expansion, and strong cash from operations” had deepened CGI’s position as an active consolidator in the market.
With that in mind, this financing action appears strategically timed, securing relatively favourable rates in the current economic climate while creating substantial financial flexibility (including through freed-up cash flow beyond the direct proceeds of the offering). Combine that with the fact that CGI’s long-established ‘build and buy’ strategy has seen CGI use acquisitions as a key growth mechanism over the years, there is a high likelihood we will see more strategic M&A activity in the coming months. One of CGI’s latest acquisitions – of BJSS (see – *UKHotViewsExtra* CGI to buy BJSS: UK headcount boost of 40% | TechMarketView) - has significantly bolstered the company’s headcount and added capabilities in the UK.
The broader implications for the IT services market are worth noting. CGI's ability to secure this financing on attractive terms suggests continued investor confidence in the leading IT services providers despite economic headwinds. It also supports the idea that there will be further consolidation across the sector, with larger players like CGI positioning themselves to strengthen market share through strategic acquisitions, particularly in areas like AI, cloud transformation, and cybersecurity solutions, where scale and investment capability can often be an advantage when competing with mid-size players. We have seen numerous examples of CGI's competitors - from Accenture to Cognizant to IBM - strengthening their portfolios in these areas over recent months.
Posted by: Georgina O'Toole at 09:32
Tags: corporateactivity debt financing
Automation software vendor, come Agentic AI player, UiPath's Q4 results flagged up several areas of concern for investors in yesterday’s Q4/FY results. While the company delivered in-line revenue growth of 4.5% YoY ($423.6m) and exceeded profit expectations with non-GAAP EPS of $0.26 (34.1% above estimates), forward guidance signalled big challenges ahead.
The market responded harshly, with shares dropping -17.4% following the announcement. Given UiPath's underwhelming FY2026 revenue guidance of $1.53bn, implying just 6.8% growth compared to FY2025's 9.8% - and falling 3.6% below analyst expectations, you can understand why.
On the plus side, margins showed improvement, with operating margin climbing to 7.9% from 3.7% YoY and free cash flow margin jumping to 32.7% from 9.3% QoQ. Annual Recurring Revenue (ARR) remains a relative bright spot at $1.67bn, up 13.8% YoY.
However, customer acquisition costs tell a worrying story, with negative customer acquisition cost (CAC - the break-even point for sales and marketing investments) payback indicating inefficient growth investments in an increasingly competitive market. Indeed, the disconnect between improving profitability metrics and deteriorating growth prospects suggests UiPath may be prioritising its bottom-line at the expense of market expansion - a worrying strategy in the rapidly evolving automation/Agentic AI software space where scale and innovation will be critical success factors.
For investors, UiPath's decelerating growth trajectory raises questions about its competitive positioning and long-term value proposition in an industry that should be benefiting from strong tailwinds. UiPath shares are down -51.5% on where they were a year ago.
Posted by: Marc Hardwick at 08:34
Tags: results software
Posted by: HotViews Editor at 07:00
Tech Mahindra has signed a Memorandum of Understanding with the UK’s largest academic institution, The Open University (OU). The collaboration aims to bridge the gap between cutting-edge technology advancements and their real-world application, addressing global societal challenges like digital divide and sustainable urban development through research-driven solutions.
Tech Mahindra and OU will work together to advance research in Artificial Intelligence, Extended Reality, GenAI, and High-Tech solutions. The alliance with the offshore major will expand OU’s Open Societal Challenges program, addressing inequality, sustainability, and barriers to well-being, and the Open Business Creators initiative, fostering an inclusive entrepreneurial community for aspiring business owners. The collaboration will also both create opportunities for students and professionals to gain expertise in AI, digital twins, and large language models and focus on developing high-quality higher education programs in India.
Building close ties with academia has become an increasingly important dimension of IT service provider ecosystem strategies. Across the globe, Tech Mahindra has already established relationships with some fourteen colleges including Berkeley Univesity in the US, Konstanz University in Germany and Auckland University in New Zealand. The company’s involvement with the OU marks a significant extension of this community into the UK.
Posted by: Duncan Aitchison at 09:56
Tags: offshore alliance university
The latest cybersecurity sectoral analysis from the Department for Science, Innovation and Technology (DSIT) shows a market that remains robust in terms of revenue and employee growth, but with declining levels of venture funding as investor seek suppliers with clear differentiation and scaling potential.
Total annual revenue within the sector has reached £13.2bn according to the study, an increase of c.12% yoy. 70% (£9.3bn) of all UK cybersecurity revenue is earned by large firms. Medium firm revenues have increased their share in relative and absolute terms, increasing from 16% to 21%. The report highlights a significant ‘dedicated’ and growing middle market with 219 firms (up from 105 last year), identified as dedicated providers of cybersecurity with over £10m in annual revenue. The sector now employs an estimated 67.3k people, creating 6.6k new jobs in the past year alone, up 11%.
As for public sector procurement, data for 2024 suggests that public sector demand for cyber security products and services has remained strong, with 942 contracts awarded to the value of £931m (up from £772m in 2023), representing a significant increase in contract value despite a slight decrease in the number of contracts.
2024 has remained challenging for cyber security investment compared to previous years. Investment data highlights that cybersecurity firms raised c.£245m in 2024 across 74 deals. This includes £206m of investment raised across 59 deals within dedicated cybersecurity firms. This is down -24% yoy, and the lowest figure in the past 7 years, in stark contrast to record levels of investment in 2020 and 2021, with £814m raised and £1,013m raised respectively. However, these high levels were arguably due to wider macroeconomic conditions such as low interest rates, and high demand for investment into technology sectors such as cybersecurity and AI, with some significant large funding rounds such as Snyk raising over £400m in 2021.
Despite this, there remains strong confidence in the sector's growth potential, particularly given increasing digitalisation and an evolving threat landscape. The intersection with emerging technologies like AI and quantum computing has also heightened investor interest. However, investors emphasised the importance of finding companies with differentiated products and efficient scaling potential.
Some further notable trends highlighted in the report include increasing SME adoption of cyber security, the expanding role of Managed Security Service Providers (MSSPs) as MSPs increasingly incorporate cyber security into their offer (e.g. through providing SOCs) and increased adoption of AI-powered cyber security solutions, and new demand for AI security.
Posted by: Simon Baxter at 09:46
Accenture has agreed to acquire Soben, a Glasgow HQ’d global construction consultancy which specialises in data centre development and the pharmaceutical and energy sectors. The purchase aims to boost Accenture Industry X’s capital projects capabilities in advisory as well as project, cost and commercial management for clients.
Founded in 2011 as Smyth Contract Services, Soben has expanded significantly from its quantity surveying and Scottish roots. Today the firm’s services include project management consultancy, scheduling, project controls, cost and commercial management, consultancy and advisory, and carbon cost management. Soben’s 250 personnel work with leading global hyperscalers and co-location providers on major data centre construction initiatives across the UK, Europe, the US, Mexico, Brazil, India and Australia.
Since 2022, Soben has been pursuing an accelerated growth strategy focused on international expansion and establishing the operational capabilities required to support a larger business. The firm’s revenue jumped by almost 50% yoy to £17.2m in 2023, albeit the associated investments resulted in a bottom-line drop of c.£1m against the prior year to generate a £710k loss for period.
Attracted by what it estimates will be a $200bn annual spend on data centre development for the next 3-5 years, Accenture’s purchase of Soben is not the company’s first acquisition in the infrastructure and capital projects arena. Two years ago, it bought both Anser Advisory in the US and Comtech in Canada. These were followed in 2024 by the purchases of BOSLAN in Spain and IQT Group in Italy.
Posted by: Duncan Aitchison at 09:42
Tags: acquisition construction consultancy data centre
Further movement in the AI-led Business Process space yesterday, saw WNS acquire Houston-based Kipi.ai, a Snowflake Elite Partner specialising in data modernisation services. An acquisition that should strengthen WNS's analytics and AI practice while expanding its decision intelligence offerings across a range of sectors. Whilst the client base is currently mainly in the US, there is no reason why WNS cannot take the capabilities global.
Founded in 2021, Kipi.ai looks good on paper, claiming some 600 SnowPro certifications, 250+ proprietary AI and ML solutions, and a team of over 600 employees with data engineering expertise. The company's presence in banking, insurance, manufacturing, and healthcare complements WNS's existing client portfolio.
The acquisition aligns with growing market demand for integrated data and AI solutions (as we discussed here). While not expected to significantly impact WNS's Q4 fiscal 2025 results, Kipi.ai is projected to contribute approximately 2% to WNS's revenue less repair payments in fiscal 2026.
This move reflects a broader trend of business process players acquiring specialised AI and data capabilities as they look to create more comprehensive and compelling service offerings for their clients – in particular an opportunity exists for helping clients get their ‘data houses in order’ so to best capitalise on the potential of AI.
Posted by: Marc Hardwick at 08:20
Tags: acquisition AI data+insights
Posted by: HotViews Editor at 07:52
The UK government has announced an overhaul of how it funds, manages and regulates digital projects, promising a “start-up mindset” as it attempts to overcome the barriers to tech adoption, save taxpayer money and boost public services.
Speaking at techUK yesterday (10th March 2025), Peter Kyle (Secretary of State for Science, Innovation and Technology) said the UK had suffered from a failure of optimism and pragmatism, and without change it risks being left behind. He said there is “no possible version of that future which does not have technology at its heart” and that “transparent, adaptable, pro-innovation regulation” will be central to the government’s digital and technologies sector plan.
As detailed in the Industry Strategy (Invest 2035), the government is planning to take a portfolio approach that backs “smaller, less proven, and more disruptive businesses”. Kyle said the digital and technologies sector plan will be a partnership with suppliers, helping to strip away the bureaucracy that has stood in the way of innovation. The Regulatory Innovation Office (RIO), which launched in October 2024, is a key element in its ambition to introduce a more streamlined and pro-innovation environment. It was announced yesterday that Lord David Willetts has been appointed as RIO’s chair.
Kyle’s speech coincided with a flurry of tech-focused announcements from the government, including the publication of the Performance Review of Digital Spend. The government-wide performance review of digital spending was commissioned by Darren Jones (Chief Secretary to the Treasury) in August 2024. Key findings from the Review echoed many of those detailed in the recent State of Digital Government Review. They include the need for a significant shift in how digital initiatives are funded, managed, and tracked; that there is often insufficient funding for service maintenance and improvement; and the need for earlier involvement of digital experts in policymaking.
As recommended by the Review, the government is shifting to a “test and learn” approach for digital and AI spending. This includes testing four new funding models. These comprise staged funding for innovative technologies; staged funding for live services; portfolio outcome-based funding; and risk reduction in technical debt and cybersecurity investment. The government’s aim is to “test, iterate and institutionalise” these new approaches to funding by Spending Review 2027 (SR27).
In Kyle’s speech there was a clear recognition that government had failed to be a reliable partner for industry and an acceptance of the need for change. The approach of regulating in favour of innovation will be welcomed by technology suppliers; as will the shift towards staged funding, which should help reduce bureaucracy, improve time to delivery, and allow good ideas to scale. The announcements, which follow the publication of the Blueprint for a Modern Digital Government, clearly emphasise the criticality of digital technology in the government’s efforts to deliver its Plan for Change. As economic pressures continue to harm the government’s spending plans, much will depend on this month’s Spring Statement; however, AI and digital will continue to sit at the heart of plans to boost the economy and improve productivity.
Posted by: Dale Peters at 10:14
Tags: strategy funding investment policy government innovation digital AI productivity
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