UK government targets ‘startup’ mindset in AI funding overhaul

Public sector AI funding will be overhauled in the UK in a bid to simplify processes and push more projects into development, the government has revealed.

Announced by the UK’s Department for Science Innovation and Technology (DSIT), the new approach to spending will seek to embed a “startup” mindset and change how the government funds small AI projects and outdated tech replacements.

The move comes after a review found many digital projects contend with complex spending approval processes that can slow or even completely derail them.

Four new approaches to funding will be trialed beginning in April, including building on the government's in-house chatbot to provide ‘staged funding’ for projects.

The government will look to support ideas with more agile funding processes to increase the speed at which prototypes are built and tested. Projects will then be supported by increasingly larger tests if they show promise.

DSIT said there will also be a focus on creating new metrics and evaluation plans for outcomes so the government can ensure value is being delivered for the taxpayer.

“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,” technology secretary Peter Kyle said.

“This review will help us build technology that will mean businesses can skip the admin and get on with driving growth,” Kyle added.

Industry reaction has been largely enthusiastic, with Jordan Legg, chief AI officer (CAIO) at Takara AI, describing the move a “positive development” in the UK tech landscape.

“The procurement and funding processes in the public sector for AI startups like ours are often convoluted and complex. Simplifying and expediting these processes will enhance cost-effectiveness and efficiency, ultimately providing tangible proof of concept,” ” Legg told ITPro.

“However, there remains room for improvement in clearly defining the scope of their initiatives. Merging two entire departments is overly ambitious and likely to falter,” Legg added.

UK public sector in need of digitalization

If this spending reform works, it could provide a much-needed boon to the UK public sector’s ailing digital infrastructure which was described as “archaic” in a recent government report.

The report found that outdated technology is holding workers back, damaging public sector productivity, impacting customer satisfaction, and costing the UK taxpayer £45 billion.

Research from Appian made a similar claim, finding that staff are spending a total of over 30 million hours on unnecessary extra work every week due to inefficiencies in service delivery.

Over 90% of public sector workers said their organization found adapting processes challenging, particularly regarding changing service demands and government policies.

Early last year, the National Audit Office (NAO) warned that the UK government will need to make serious changes in order to reap the benefits of AI as aging IT infrastructure, skills gaps, and data issues threaten to cause problems.

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