Spending Review: £2bn to back AI action plan

11/06/2025 | GEORGE BARKER

Spending Review: £2bn to back AI action plan

Chancellor of the Exchequer Rachel Reeves announced £2bn in funding to support the Government’s artificial intelligence (AI) action plan in her spending review speech.

The Government has allocated £2bn for AI from 2026-27 to 2029-30. The cash will cover a '20-fold expansion of the UK’s AI Research Resource', helping to further fund research into new AI technologies, the Treasury said.

It will also support collaboration between UK businesses and universities to develop new AI courses, launch new AI fellowships and establish a new AI talent scholarship. There are plans to create a new AI Adoption fund for the public sector.

The cash will also directly fund public services departments to ‘build strong digital and technology foundations’, to modernise public service delivery and to overhaul government productivity and efficiency.

An uplift of £1.2bn total departmental expenditure limit (DEL) investment is being provided to the Deportment for Science, Innovation and Technology (DSIT), with a focus on digital public infrastructure and modernising public services through the power of AI.

Ministers also hope to scale the ‘most promising opportunities’ in AI in the public sector, such as making faster planning decision and increasing productivity.

This announcement comes on the heels of the Department for Transport (DfT) publishing its Transport AI action plan, which outlines plans to secure the UK’s position at the ‘forefront of transport-related AI applications’.

This SR has also prioritised research and development (R&D), with an increase in funding to £22.6bn by 2029/30.

The Government said this increase will deliver £500m for the new R&D Missions Accelerator Programme, at least £1bn over to scale up the Advanced Research and Invention Agency (ARIA) and up to £750m for a new supercomputer at Edinburgh University.

The Government is also launching a new £410m Local Innovation Partnerships Fund, which will give local leaders a ‘central role’ in co-creating R&D programmes to support local economies.

Image credit: Shutterstock @TippaPatt

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