UK urges NHS and MoD to buy British tech to boost AI growth

Published: 14 March 2026. The English Chronicle Desk. The English Chronicle Online

The UK government is preparing a new strategy to encourage major public institutions such as the National Health Service and the Ministry of Defence to purchase more British-developed technology, as ministers look to artificial intelligence and innovation to drive economic growth during a period of global uncertainty. The move comes amid rising geopolitical tensions linked to the Iran crisis, which has already sent oil prices sharply higher and raised fears about inflation and slower economic expansion.

The initiative has been trailed by Treasury minister Spencer Livermore, a close ally of Chancellor Rachel Reeves, who said the government wants to ensure the British state becomes a more active customer of domestic technology companies. According to Livermore, the government believes that supporting homegrown innovators through public procurement could accelerate economic growth and strengthen the country’s resilience during uncertain times.

Reeves is expected to set out the government’s economic direction in a major lecture next week, outlining what ministers describe as a long-term plan to support growth despite global instability. The strategy will focus on three major priorities: building closer economic ties with the European Union, strengthening regional economic connections within the UK, and investing heavily in the opportunities created by artificial intelligence.

Livermore said the government intends to present what he described as “an optimistic case” for AI, even as concerns grow about the technology’s potential impact on employment. While critics warn that automation could threaten jobs, particularly for younger workers entering the labour market, ministers argue that faster adoption of new technology will ultimately expand economic opportunities.

“There are massive opportunities here,” Livermore said, emphasising that the government wants Britain to become one of the fastest adopters of artificial intelligence globally. He suggested that increased productivity and innovation would create new industries and employment opportunities over time.

At the centre of the plan is a proposal to make it easier and faster for public bodies to purchase emerging technologies. The government believes that many British technology startups struggle to secure contracts with the state because of slow procurement systems and risk-averse institutions.

To address this, ministers are planning to establish a “rapid innovation procurement taskforce” designed to operate outside the traditional government purchasing framework. The taskforce will initially focus on projects within the NHS and the Ministry of Defence, two departments with large budgets and significant technological needs.

Livermore argued that the state must become a more proactive partner for innovative companies. “The UK government is too slow to buy new technologies,” he said. “If you think about AI and the speed with which technology is changing, we’re very rarely the first customer for those companies. That’s got to change.”

The proposal reflects growing recognition in government that public spending decisions can influence the direction of technological development. By prioritising British suppliers where possible, ministers hope to encourage domestic investment and strengthen the country’s technology sector.

The plan comes as the government faces criticism over its relationship with major American technology companies, including contracts involving the US firm Palantir Technologies and the National Health Service. Critics argue that too much reliance on overseas tech providers could weaken the UK’s own digital economy.

Recent analysis has also suggested that some high-profile AI investment announcements promoted by ministers have yet to produce tangible financial commitments. Livermore acknowledged that challenges remain but insisted the government’s new procurement approach would help ensure more real-world adoption of emerging technologies.

Alongside its focus on AI and innovation, the government is also signalling a willingness to revisit Britain’s relationship with Europe. Livermore suggested that ministers now feel more confident discussing the economic consequences of Brexit openly.

“The consequences of Brexit are showing to be worse even than people thought at the time,” he said, calling for what he described as a “fact-based conversation” about the UK’s future economic ties with the European Union.

However, he stressed that the government will not cross the red lines set out in Labour’s election manifesto, which include maintaining restrictions on free movement of people. Instead, ministers are expected to explore ways to deepen trade and regulatory cooperation while remaining outside the EU’s single market.

The government’s economic plans are being shaped by the rapidly evolving global situation. The ongoing Middle East conflict and tensions involving Iran have created uncertainty in international energy markets, pushing oil prices higher and raising concerns about renewed inflationary pressure.

Livermore, who previously served as an adviser to former prime minister Gordon Brown, insisted that the UK economy entered this period of instability from a position of relative strength. He pointed to falling inflation, improving financial market conditions, and the government’s efforts to stabilise public finances as evidence that the country is better prepared for economic shocks.

Within the Treasury, Reeves has established an internal group informally known as the “Iran Board”, tasked with analysing the economic risks associated with the Middle East crisis and preparing contingency plans. Officials are examining a range of potential scenarios, from short-term disruptions in energy markets to a more prolonged global slowdown.

Despite the uncertainty, Livermore argued that the government’s broader economic philosophy — described by Reeves as “securonomics” — is designed precisely for moments like this. The concept emphasises a more active role for the state in guiding economic development, supporting key industries, and strengthening regional growth.

Under this approach, the government aims to direct investment toward sectors seen as strategically important, including advanced technology, clean energy, and digital infrastructure. Ministers also plan to continue efforts to rebalance the UK economy by strengthening links between major regional centres such as the Oxford-Cambridge innovation corridor and northern English cities.

“Clearly, the impact on the British economy will depend on the severity and the duration of this crisis,” Livermore acknowledged. “But we are doing the right things in the Treasury to prepare for whatever scenario comes our way.”

For ministers, the coming months will test whether technological investment and closer economic partnerships can deliver the growth needed to shield the UK economy from global turbulence. As geopolitical tensions reshape the international landscape, the government hopes that innovation — particularly in artificial intelligence — will become a central pillar of Britain’s economic resilience.