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Spending Review: AI action plan to receive further £2bn funding

by Richard Browne
11 June 2025
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The UK government will be investing £2bn more in digital and artificial intelligence (AI) across public services, including in the NHS, according to chancellor Rachel Reeves. 

Delivering her Spending Review today, Reeves (pictured) said: “Because homegrown AI has the potential to solve diverse and daunting challenges, as well as the opportunity for good jobs and investment here in Britain, I’m announcing £2bn to back this government’s AI action plan.”   

The plan will be over seen by the Department of Science and Technology. 

The Spending Review report went into more detail and said the investment aims to build the UK’s sovereign AI capabilities, funding at least a 20-fold expansion of the UK’s AI Research Resource and backing UK AI companies to grow and scale through the new UK Sovereign AI Unit.

It said: “The government is funding collaboration between business and the UK’s world-class universities to develop new AI courses, launch new AI fellowships and establish a prestigious new AI talent scholarship to develop the AI skills of the future.

“The government will also support AI diffusion through a new AI Adoption Fund.”

The increase in funding for AI will be a part of a wider increase in government funding for research and development (R&D) in the technology sector. 

Reeves said:  “We are backing our innovators, backing our researchers and backing our entrepreneurs with R&D funding rising to a record high of £22bn per year by the end of the spending review.”  

And Reeves said that government would also be increasing the technology budget for the NHS. 

Reeves said: “I am increasing the NHS technology budget by almost 50%, and we’re investing £10bn to bring our analog health system into the digital age, including through the NHS app, so patients can manage their prescriptions, get their test results, and book appointments all in one place.” 

The Spending Review said there would be: “a step change in investment in digital and artificial intelligence (AI) across public services, including in the NHS.  

“The government will build strong digital and technology foundations, tackle urgent cybersecurity and technical resilience risks, modernise public service delivery and drive a major overhaul in government productivity and efficiency.“

 

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