Having had no dedicated money set aside as recently as 2023, government’s benefits agency now commits tens of millions of pounds for emerging tech each year, after an investment increase

The proportion of the overall IT budget of the Department for Work and Pensions that was allocated to invest in artificial intelligence increased sixfold last year.

As recently as 2022/23, the “DWP did not allocate direct funding for AI prior”, according to Baroness Maeve Sherlock, a junior minister at the department.

The following year, which ran until the end of March 2024, saw the department dedicate 0.4% of its annual IT budget to AI.

A report from published by the National Audit Office a year ago indicated that the DWP’s tech budget in FY24 was £1bn – which, based on Sherlock’s figures, would mean that about £4m was ring-fenced for artificial intelligence.

The minister revealed that, in the 12-month period to March 2025, the proportion of the department’s IT funding dedicated to AI increased more than sixfold – to 2.5%. Based on an overall budget of £1bn, this would equate to a spending pot of £25m.

The figure was set at 2.2% in FY25 but, according to Sherlock, “whilst the current year shows a reduction in percentage terms, the [monetary] investment represents a similar value, demonstrating the department’s drive to use AI within its digital transformation strategy”.

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The minister, whose comments were made in answer to a written parliamentary question from Conservative peer Baroness Deborah Stedman-Scott, highlighted some significant investments the DWP has already made in new tech, and suggested much more is to come.

“DWP’s Strategy for 2030 sets the direction for how we will transform delivery of our services over the next few years. AI and modern IT systems will play an important role in that strategy,” she said. “We collaborate with stakeholders to identify key areas where AI can solve business challenges and add value, co-designing solutions with these stakeholders. A secure version of Microsoft Copilot Chat is now available to all DWP colleagues. We are providing this capability to enable colleagues to safely explore how AI can contribute to their roles.”

Last month, the DWP signed a potential £30m-plus agreement with tech giant IBM in a deal intended to help the organisation to better use AI to deliver its key objectives over the coming months and years.

Notable current uses of the technology in the department’s policymaking and services include using predictive systems to try and identify parents that are most at risk of defaulting on child maintenance payments.

As of earlier this year, DWP officials are also now allowed to use the likes of ChatGPT and other common large language models on official business or via government-issued devices. The use of these tools was previously prohibited – although the Chinese-manufactured DeepSeek platform remains forbidden.