Today, Rachel Reeves delivered the first Labour Budget since the late Alistair Darling in March 2010 – and the first-ever budget by a female chancellor.
The Budget is the government’s opportunity to make a statement about the nation’s finances and outline any changes it wants to make to taxes. The government has also used the opportunity to kick off a spending review, which outlines its plans for government spending.
It often takes several days for everything to become clear (or, in some cases, unravel) after a budget. But we’ve quickly looked at what’s in there around data, AI and digital. Please let us know if we’ve missed anything!
Artificial intelligence
For all the recent fanfare about AI, there’s relatively little specific to AI in the main Budget document. We’re told the government will ‘shortly publish’ the AI Opportunities Action Plan pulled together by Matt Clifford, which will set out ‘a roadmap to capture the opportunities of AI to enhance growth and productivity and better deliver services for the public’ (p77). There’s also a glancing mention under Net Zero and Clean Energy, noting that ‘accelerating grid connections and building new network infrastructure’ will help growth sectors like AI and data centres (p78).
Data
AI is also mentioned in the context of the National Data Library. The Budget reiterates the government’s intention to create this in order to:
‘unlock the full value of our public data assets. This will provide simple, ethical, and secure access to public data assets, giving researchers and businesses powerful insights that will drive growth and transform people’s quality of life through better public services and cutting‑edge innovation, including AI’ (p77 and p103).
There doesn’t appear to be any further information about how much funding it will get. The ODI recently wrote about what we’d like to see from a National Data Library, and ensuring the data is AI-ready.
There are some numbers against the UK Statistics Authority, which includes the Office for National Statistics. That will have £365.4m in 2025/26 (compared to £349.2m this year) to fund ‘the ongoing production and improvement of national statistics’ – particularly ‘work to recover the quality’ of labour market statistics – and other projects, including building on the Integrated Data Service to help inform the government’s missions (p112).
Elsewhere:
- HMRC gets £12m to acquire credit reference agency data to help it target debt collection activities; there’s also a consultation coming in early 2025 ‘on modernising how HMRC acquire and use third-party data to make it easier for taxpayers to get tax right first time’ (p126)
- There’s a big open data scheme, Fuel Finder. This is a statutory scheme for road fuel prices – petrol stations will be required to report prices and unavailability of fuel within 30 minutes of a change – which the government intends to launch by the end of 2025 (p133)
- DWP will ‘continue to collaborate’ with departments including HMRC, the Home Office and the Department for Science, Innovation and Technology ‘to further strengthen data sharing and explore new data innovations to tackle fraud and error’. This includes a mention of new powers to get hold of data from banks and other financial institutions as part of the forthcoming Fraud, Error and Debt Bill (these caused some controversy when part of the previous government’s Data Protection and Digital Information Bill) (p41)
- The government ‘will also explore how better data use and sharing across government departments can improve the targeting of economic support to households, especially in times of crisis’ (p139).
DSIT and the digital centre
The Department for Science, Innovation and Technology (DSIT) will have a (DEL) budget of £15.1bn in 2025/26, which the government says is a growth rate of 6.5% from 2023/24 (p102). Most of that – £13.9bn – is R&D investment.
There are quite a few mentions of the work to make DSIT the ‘digital centre’ of government and drive better delivery of public services (one of the government’s early announcements was bringing the Central Digital and Data Office, Government Digital Service and Incubator for AI over from Cabinet Office into DSIT) (p102-3).
This is said to be a key part of the government’s plans for a ‘mission-led, technology-enabled, reform-driven’ second phase of the spending review, to be delivered in late spring (civil service-speak for summer). With the Cabinet Office, the Treasury and DSIT working closely together, ‘a renewed strategy for digital transformation across the public sector to ensure that fundamental reforms in public services are prioritised and digital-led’ will ‘inform a centralised and coherent approach to digital investment’ (p57-8).
The government is also 'developing a strategic plan for a more efficient and effective civil service, including through improving skills and harnessing digital technology to drive better outcomes for public services’ (p40) and DSIT is investing ‘£80 million to support the transformation of corporate functions across government, to deliver more efficient, cost‑effective and modern systems as part of government’s Shared Services Strategy’ (p103).
The Chancellor mentioned digital transformation in her speech – ‘Today we are setting a 2% productivity, efficiency and savings target for all Departments to meet next year by using technology more effectively and joining up services across Government’ – and there are some specific mentions of digital transformation in public services in the Budget, including:
- Plenty around HMRC, including making it ‘a digital‑first organisation, with a Digital Transformation Roadmap to be published in spring 2025’ (p107, see also p123 onwards)
- Funding for ‘Digital Jury Bundles to transform paper-based jury packs into more efficient and productive tools for criminal trials’ (p87)
- Increased budgets for the Land Registry to invest in digital transformation of land ownership records (p112)
And, as part of a major consultation which (among other things) should shift the National Health Service from an analogue service into a digital one:
Invest more than £2 billion in NHS technology and digital to run essential services and drive NHS productivity improvements, to free up staff time, ensure all Trusts have Electronic Patient Records, improve cyber security and enhance patient access through the NHS App. In implementing the settlement, DHSC (including the NHS) will deliver 2% productivity next year. (p52)
Everything else
Other announcements include:
- A ‘Cross-government Review of Technology Adoption for Growth, Innovation and Productivity’ from government Chief Scientific Adviser, Professor Dame Angela McLean, and National Technology Adviser, Dr Dave Smith. This will look at ‘barriers to the adoption of transformative technologies that could enhance innovation and productivity’, particularly in the eight sectors identified in the recent industrial strategy. That will feed into the further development of the industrial strategy and sector plans to be published alongside phase 2 of the spending review (p142).
- Core R&D budgets under the Department of Health and Social Care are to be protected, with ‘a real terms increase in funding for the National Institute for Health and Care Research to support the NHS and wider health and care system in driving a revolution in research, life sciences, med tech and data’ (p53)
- It wouldn’t be a government fiscal event without something on rolling out broadband – this time round, it’s ‘Investing over £500 million in 2025‑26 to deliver Project Gigabit and Shared Rural Network to drive the rollout of digital infrastructure to underserved parts of the UK, including delivering full gigabit broadband coverage by 2030’ (p65)
- There’s support for small businesses wanting to digitise, with an extension of the SME Digital Adoption Taskforce (which will produce an interim report early in 2025) and details of £4m in pilots for tech adoption for SMEs to follow. And, for small manufacturing businesses, increases in funding for the Made Smarter Innovation and Made Smarter Adoption programmes across England to help them adopt advanced digital technologies (p75)
- And as part of the funding settlement for the Competition and Markets Authority, there is funding for the Digital Markets Unit ‘to oversee a new regulatory regime for the most powerful digital firms, promoting greater competition and innovation in these markets and protecting consumers and businesses from unfair practices’ (p112).
What the ODI thinks
Our recently updated policy roadmap outlines our key policy asks. Some of them – such as better use of data in public services, introducing the National Data Library, and thinking about data and digital infrastructure to support growth and innovation across the country – are reflected in Budget announcements. Others – including supporting smart data schemes, enabling researcher access to data from social media platforms, updating our intellectual property regime, and implementing AI regulation – are being covered through other initiatives.
But as the government settles into office, we hope to see more detail on all of these – and a greater focus on ensuring diverse civil society and public voices are heard in decisions about data and AI. The ODI stands ready to work constructively with policymakers, civil society organisations, businesses, and other stakeholders to help build a thriving data and AI ecosystem that serves the interests of all while delivering growth and value for taxpayers.
