One pound in ten of the £3.25bn transformation fund will support the work of GDS in the next two years, while its parent department will invest in new AI units
The Spending Review has committed funding of “up to £1.9bn” for efforts in the coming years “to deliver a modern digital government”.
About £1.2bn of this will go directly to the Department for Science, Innovation and Technology, Whitehall’s lead tech department and the new home of the Government Digital Service.
This will include investment in the ongoing “rollout of new products and services such as the GOV.UK Wallet and App, and productivity-enhancing AI tools across the public sector, and replacing legacy systems”, according to the full text of the SR25 document.
The Treasury has also outlined a total of £323m being drawn from the £3.25bn government transformation fund announced in March and now awarded to better enable the cross-Whitehall work of GDS – otherwise known as the “digital centre of government”.
This includes £13m being provided in the current fiscal year, followed by £194m in 2026/27 and £116m in 2027/28.
The initiatives delivered by GDS – and the wider Department for Science, Innovation and Technology – will be informed by a new “Government Digital and AI Roadmap, to be published in the autumn, which will set out the government’s digital priorities to deliver better public services”, the Spending Review says.
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DSIT’s overall annual departmental budget will rise from its tally of £15.2bn in the current fiscal year up to a total of £16.5bn in 2028/29.
Spending on the day-to-day running of the department will total £600m this year, growing to £800m in each of the next two years, before being reduced to £700m in 2028/29. Money allotted for capital spending will increase from the current total of £14.7bn in FY26 up to a £16.2bn in 2029/30.
DSIT-led initiatives backed in the government funding exercise include a commitment of £240m intended to help “the AI Security Institute to remain at the forefront of frontier AI research”. A further £500m will be spent on “the creation of a new UK Sovereign AI Unit working with the British Business Bank to support the emergence of national AI champions”.
The money assigned to these two units is part of a wider package of £2bn to be invested across government and the wider country between now and the end of the decade “to implement the AI Opportunities Action Plan in full”, according to the Treasury.
The review document says: “Over this SR period, the government is committing to a step change in investment in digital and artificial intelligence across public services, including in the NHS. The government is providing funding directly to departments to build strong digital and technology foundations, modernise public service delivery, and drive a major overhaul in government productivity and efficiency.”
Over the coming years, digital investments across government will be informed by a recent assessment which concluded that government should explore different ways of funding digital products and projects.
The SR25 adds: “To ensure that investments in digital, data and technology deliver their intended outcomes, the government will continue to implement recommendations from the Performance Review of Digital Spend. This will include testing and scaling new funding models for digital delivery and ensuring that digital investments have clearly defined and tracked outcome metrics.”
