Baroness Kidron

The Government is taking several steps to support UK-headquartered AI companies and SMEs in procurement:

• We are specifying social value criteria in procurement decisions that support selecting SMEs as implementation partners, and running targeted secondary procurements sized appropriately for smaller suppliers, informed by insights from SMEs and industry bodies including TechUK, AI UK, and Innovate UK.
• The AI Opportunity Scanning Team, now fully operational, provides cross-government technical horizon scanning and market intelligence to understand evolving AI capabilities and supplier landscapes.
• We are exploring innovative procurement approaches through the Commercial Innovation Hub and have launched the National AI Tender for a GOV.UK Agentic AI Companion following positive market engagement.
• The Open Source AI Fellowship programme, launched via the Alan Turing Institute, brings open-source AI specialists into government.
• The AI Knowledge Hub is being updated to include comprehensive technical guidance to support informed procurement decisions.

This government is committed to supporting SMEs and British business as much as possible including through procurement. The current edition of the AI Playbook for government contains broad advice for decision makers looking to procure effective, ethical and safe systems. Updates to Government guidance will have lines on how to adhere to the Procurement Act (2023) which came into force this year. The Act has specific provisions to encourage government procurement from small and medium sized by enhancing transparency and competition.

DSIT does not collate spending on AI procurement across all government departments. Procurement decisions and tracking of associated costs, including those for AI tools and services, are the primary responsibility of each individual government department. The government remains committed to providing new opportunities for UK AI companies to scale and succeed. The government is going further and faster to reform our approach to procurement so that it can shape markets and manage demand, putting in place measures to identify, nurture and protect the UK’s high-growth modern Industrial Strategy sectors like AI. DSIT’s role focuses on fostering an enabling ecosystem, and supporting the growth of the UK's AI sector, including through initiatives such as AI Growth Zones and pledging up to £100million through the Advanced Market Commitment to help AI hardware start-ups gain a competitive edge and win customers alongside established vendors.