The UK Government has set out an ambitious vision for economic growth, with artificial intelligence and technology at its core.
In his recent remarks, Peter Kyle MP, Secretary of State for Science, Innovation and Technology, outlined the Government’s approach, stating: “Growth is the central mission of this government. And there’s not an element of the growth we’re creating – building new homes, bettering hospitals and schools, creating safer streets – that AI can’t help power. There are no half-measures here. Matt Clifford put forward 50 recommendations in the Action Plan – we’re going forward with everyone. All so the British people reap the rewards.”
This declaration underscores a shift in how the Government envisions national progress, positioning AI as an engine to drive growth across multiple sectors. However, the real test lies in the delivery. While Westminster sets the agenda, it is local and regional Government that must implement these ambitions. From regional councils to city mayors, the challenge is not just one of adoption but also of capability, co-ordination, and public trust.
The AI Opportunities Action Plan, unveiled in January 2025, seeks to embed AI-driven efficiencies into the public sector. The Government is making big promises, including significant investment in computing infrastructure, creating data-sharing frameworks, and attracting top global talent. But while the policy documents are optimistic, the capacity of local authorities to translate these pledges into tangible change remains an open question. AI’s impact will be felt in areas such as local transport networks, public services, and urban planning, but councils must first have the resources and expertise to harness these tools effectively.
This push for an AI-powered economy is part of a broader strategy, exemplified by the forthcoming Industrial Strategy, Invest 2035, currently under consultation. The Government aims to provide long-term economic certainty, fostering a business environment that rewards innovation and skills development. The question is whether these initiatives will truly be inclusive, benefiting regions outside of London and the South East. For many local leaders, this is not just about technological adoption, it is about ensuring regional investment and equitable growth.
Beyond policy blueprints, the regulatory landscape is also shifting. Later this year, the Government will introduce an AI Bill, which aims to set the parameters for responsible AI deployment. Alongside this, the Digital Information and Smart Data Bill is expected to outline critical safeguards around data governance. Together, these legislative efforts seek to balance the promotion of AI with public concerns about privacy, fairness, and security. Yet, this regulatory direction also brings added complexity for local authorities, who must navigate compliance while still driving forward digital transformation.
At the heart of these discussions is the readiness of local government. Most councils are expected to deploy AI solutions in areas such as traffic management, urban development, and service delivery, but many are already grappling with budgetary pressures and staff shortages. The promise of AI growth zones – designated areas with accelerated planning approvals – could provide some relief, but without targeted support, these initiatives risk exacerbating regional disparities rather than alleviating them. Moreover, the role of community engagement cannot be overlooked. The success of these policies hinges on public trust, and local governments must lead the effort in ensuring AI integration aligns with societal values and expectations.
Ultimately, if the Government’s AI-led growth strategy is effectively executed, it could place the UK at the forefront of global innovation, enhancing productivity and regional economic performance. However, without a clear plan to enable local authorities to fully integrate AI into service delivery and planning, opportunities for efficiency and growth could be missed.
The Government may be intent on pressing ahead with all 50 recommendations from the AI Opportunities Action Plan, but delivery will be determined not in Westminster, but in town halls across the country.
The success of this agenda will depend not only on cutting-edge technology but on how well AI is embedded into local economic strategies. With the right support, local government can leverage AI to drive efficiencies, attract investment, and create more dynamic regional economies. But without it, the AI revolution risks becoming an unevenly distributed opportunity rather than a true driver of nationwide growth.
Featured image via Alecsandra Dragoi/DSIT.
Peter Kyle
DesignationSecretary of State for Science, Innovation, and Technology
