UK Treasury pushes wider AI rollout across public services amid productivity and fiscal pressure

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UK Treasury AI rollout

Highlights

Chief Secretary Lucy Rigby prioritises rapid AI adoption across Whitehall, targeting productivity gains in the NHS, HMRC, and justice systems.
Official data show public sector productivity growth of 0.4 per cent in 2024 and 0.6 per cent in 2025, both below the pre-pandemic decade average.
The government’s AI push coincides with fiscal pressure from the energy crisis and geopolitical risks, raising investor concerns over Chancellor Rachel Reeves’ fiscal rules.

Whitehall AI deployment expands across core services

As reported by the Financial Times, Chief Secretary to the Treasury Lucy Rigby says failing to speed up AI adoption in public services would amount to the UK choosing decline, and she is making the technology a priority across Whitehall.

Rigby points to early signs of stronger productivity in the NHS and says AI needs to be embedded across whole organisations rather than limited to individual teams or processes. Officials identify HM Revenue & Customs as one area where the technology could help reduce case backlogs.

Projects already being tested include transcription tools for case notes in the justice and health systems, chatbots handling HMRC queries, fraud detection in tax and benefits, and automation for local council planning decisions. Civil servants are also using AI to summarise consultation responses and assess possible political objections to proposed projects.

The NHS is seeking to use AI to guide doctor consultations and interpret scans, with the aim of easing staffing needs. Over the longer term, ministers hope a digital ID system will allow AI to combine data from different parts of the state to provide more personalised support, such as benefit prompts or passport renewal reminders.

Productivity gains tied to wider economic strain

Official data show public sector productivity growth of 0.4 per cent in 2024 and 0.6 per cent in 2025, still below the average annual growth of 0.7 per cent in the decade to 2019. Rigby also cites an NHS report published in February that found 2.6 per cent productivity growth in the acute sector in the first half of fiscal year 2025-26.

The government’s push for broader AI use coincides with renewed strain on the UK’s public finances from the energy crisis and uncertainty linked to the war in Iran. Investor concerns over the fiscal outlook have also been sharpened by questions around the durability of political support for Chancellor Rachel Reeves’ fiscal rules.

Rigby says Reeves’ commitment to those rules is paramount and ironclad, while arguing the Treasury’s economic plan is showing signs of success, including first-quarter GDP growth of 0.6 per cent. She also says tax reform remains a long-term issue after comments from Labour leadership hopeful Andy Burnham on land taxation, describing the UK tax system as complicated and saying there are valid arguments for simplification.

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