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Revealed: How much the government’s spending on AI | Politics News

The Owner Press by The Owner Press
November 4, 2025
in The Boardroom
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Sir Keir Starmer says AI will enhance public providers, put cash in your pocket, create jobs and enhance your youngsters’s future.

Politicians are betting the home on it – however how a lot are they really spending? And on what?

Sky Information requested consultancy Tussell, which analyses authorities contracts and spending, to assist discover out.

AI is kind of a big deal for the prime minister. Pic: PA
Picture:
AI is form of a giant deal for the prime minister. Pic: PA

Over £3.35bn is the general spend by authorities departments on AI contracts, infrastructure and providers, for the reason that know-how actually since on the scene in about 2018. The variety of contracts has been going up every year.

The largest by far is a 2021 contract by the Met Workplace with Microsoft to construct the world’s strongest climate and local weather forecasting supercomputer, plus a number of small contracts for departments to make use of its Copilot AI.

It is price greater than £1bn general.

One other large contract is for Init – the German public transport know-how firm – with Transport for London, price £259m.

However this may be stunning: one of many smallest recipients is Alphabet.

The corporate behind Google, and a large AI investor, has simply two contracts with the Cupboard Workplace and the Ministry of Justice, price £2.5m.

Fellow US agency Palantir has a lot of smaller worth contracts – 25 in whole, price £376m.

Its UK boss, Louis Mosley informed Sky Information that Palantir helps junior docs draft discharge summaries. And in defence, it helps intelligence officers collate data and course of it extra shortly.

Requested whether or not folks had been proper to be involved about large AI corporations coming in and utilizing their information, he replied: “These are very reputable issues, they usually’re proper to interrogate this, however Palantir is definitely the reply to these issues. We’re the best way you retain information safe, and we’re the best way you make AI clear and auditable”.

‘Ministers have to be courageous’

Nevertheless, Mr Mosley stated the federal government may go additional.

“What they’re saying publicly is what they’re saying privately, however the problem is at all times a concern of change,” he stated.

“And on this case, you have to embrace change. And ministers have to be courageous. They should tackle the system and inform them that is the best way issues must work right now.

“There may be a variety of concern that tomorrow I will should do a unique factor to what I used to be doing yesterday.”

Who’s spending essentially the most?

Sky Information additionally checked out which departments have the largest spending on AI. They’re science and know-how, which has the Met Workplace contract, and transport with the Init deal.

However the largest, most data-intensive departments characteristic low down the desk.

The Treasury, which encompasses the taxman, and the Division for Work and Pensions (DWP), which handles advantages, are within the backside three.

The DWP has an annual IT funds of over a billion kilos a yr, but has spent lower than £100m cumulatively since 2018 on AI.

Learn extra from Sky Information:
PM and chancellor hit at tax rises
The underground squad with lives in their hands

Trade insiders blame a short-term authorities mindset, lack of IT experience and backwards know-how – as much as 60% of some bits of presidency are operating on legacy, older variations, of IT.

The areas of presidency the place a revolution may save us essentially the most cash seem largely as but unexplored. The AI journey has barely begun.



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