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Andy Burnham faced immediate questions over his decision to abolish the tech department on Tuesday, as peers warned the move risked disrupting Britain’s AI strategy.
Ministers were hauled before the House of Lords less than a day after the machinery of government changes to the Department of Science, Innovation and Technology (DSIT) were announced, where one peer called the reorganisation a “phenomenal waste of time” and another warned “12 months is an eternity in AI”.
City AM understands the decision originated inside the Cabinet Office before being signed off by Burnham’s team, according to people familiar with the discussions. Both No 10 and DSIT refused to comment.
The overhaul dismantles one of Labour’s central economic departments just a year after it was expanded to become Whitehall’s digital hub.
Science policy, UK Research and Innovation and the Sovereign AI Fund will move into Jonathan Reynolds’ new Department for Business, Innovation, Science and Trade.
Meanwhile, Government Digital Service (GDS) returns to the renamed Department for Digital, Culture, Media and Sport (DCMS), while the AI Safety Institute moves into the Office of the Prime Minister and Cabinet alongside a new AI taskforce.
Civil service power grab?
That largely reverses one of Keir Starmer’s first Whitehall reforms in 2024, when Peter Kyle transferred GDS, the Central Digital and Data Office and the Incubator for AI out of the Cabinet Office and into DSIT.
The aim was to bring science, digital government and AI under one department to accelerate tech adoption across Whitehall and give the sector a single voice in government.
Former DSIT adviser Ben Johnson said the transfer had never been popular inside the centre of government, telling City AM “it came from the cabinet secretary”.
“It effectively moved a central function out of the centre”, he added. “The civil service team have always been a bit annoyed about that.”
“If you tuck science, AI and innovation into the Business Department where it has to compete with workers’ rights, steel and industrial strategy, it’s just not going to get a look-in.”
Tech fears split could slow AI agenda
Responding to the urgent Lords question, Cabinet Office minister Baroness Anderson said science and AI should no longer sit inside a standalone department but be embedded across Whitehall.
“We should not see science and technology as an isolated issue,” she said, arguing the changes would create “a more coherent, agile and effective government framework”.
On BBC’s Radio 4’s Today, business secretary Jonathan Reynolds also insisted science would be “at the forefront” of the enlarged department and that combining research with business and trade would improve the commercialisation of British innovation.
But before the changes were even confirmed, Startup Coalition and TechUK warned Burnham that dismantling DSIT would be “the wrong change at the wrong time”, arguing it would slow work on the AI Safety Institute, Sovereign AI Fund, UK Research and Innovation and digital government.
Startup Coalition executive director Dom Hallas said the government appeared to be moving AI policy closer to the centre of government but questioned whether splitting responsibility between three departments would make delivery harder.
He said technology would now compete for ministers’ attention inside the enlarged business department while digital policy returned to DCMS, where technology would again sit alongside media, culture and sport.
Kanishka calms nerves
“The abolition of DSIT is clearly a bad thing,” Hallas said. “But if anyone could make up for it in Cabinet it would be Kanishka, who knows startups and the ecosystem better than anyone in government.”
That is partly why Burnham has elevated AI minister Kanishka Narayan to attend Cabinet.
Narayan will jointly serve across the Office of the Prime Minister and Cabinet and DBIST, while the AI Safety Institute will move into the centre of government.
The government has said the new structure will embed AI across Whitehall, but concern has risen on whether that will fragment responsibility for one of Britain’s fastest-growing industries at a time when ministers are trying to attract investment and compete with the US and China.
