The UK government has confirmed a £3.25bn Transformation Fund to accelerate digital modernisation across the public sector and “seize the opportunities of artificial intelligence”, as part of the 2025 Spring Statement.
The fund, announced by chancellor Rachel Reeves, will invest in AI, automation and digital skills, with an initial £42m allocated to Frontier AI Exemplars to develop cross-government applications that reduce bureaucracy and improve public services.
By 2030, one in 10 civil servants is expected to be a digital professional, with roles spanning AI systems, data science and process automation.
Reeves described the programme as “a foundation for a smarter state”, pledging to “unlock the productivity gains digital tools can bring”.
Among early examples, HMRC is piloting AI-driven customer service tools, voice biometrics and automated tax debt recovery.
A further £400m will be ringfenced from April for UK Defence Innovation (UKDI), supporting autonomous systems, AI-enabled capabilities and dual-use robotics.
From 2026, at least 10% of defence equipment procurement will be reserved for such technologies.
Tech and digital economy minister Chris Philp said the UKDI programme would “transform the defence sector into an engine for growth, where UK robotics firms can scale faster and deliver national security innovations”.
Despite these headline commitments, several industry voices expressed concern that the Spring Statement failed to provide the breadth of support and long-term clarity needed to accelerate digitalisation across the wider economy.
READ MORE: UK Robotics Growth Partnership outlines 10-year plan for smart machines
Georgia Gibson-Smith, tax disputes and disclosures manager at Menzies, said the digital and tech sector “remains a key area for growth”, but added that the Treasury’s single-event fiscal strategy meant delays in funding certainty.
“We hope the chancellor will offer positive updates and no cuts to spending in this area,” she said.
She also called for “certainty over the implementation date for Making Tax Digital for Income Tax Self Assessment”, which is currently set for phased rollout from April 2026 after multiple delays.
On tax planning, Gibson-Smith said that a reversal of the proposed capital gains tax increases for Business Asset Disposal Relief could “give back tech business owners the flexibility to consider their options”.
Others were more critical. Alan Stephenson-Brown, CEO of Wigan-based network solutions provider Evolve, expressed frustration over the absence of updates on connectivity commitments.
“The £500m earmarked for Project Gigabit and the Shared Rural Network wasn’t even mentioned,” he said. “We needed renewed commitment to bridging the digital divide, especially for underserved areas.”
Stephenson-Brown warned that high-performance networks remain a critical enabler of digital transformation, and said sustained infrastructure investment was “crucial for productivity and growth in an increasingly digital economy”.
Meanwhile, smaller businesses operating at the coalface of digitalisation expressed concern about the affordability of automation.
Stuart James, chief executive of the Independent Garage Association, said the lack of targeted relief in the Spring Statement “fails to provide the support that independent garages desperately need”.
He noted rising costs linked to National Living Wage increases and higher employer NICs, and warned that digitalisation pressures were “intensifying without the support small businesses need to adopt new technologies”.
With further policy detail deferred to the summer’s digital transformation roadmap and the autumn Spending Review, many in the robotics and automation sector are cautiously awaiting more definitive direction.
The upcoming Industrial Strategy is expected to designate automation and advanced manufacturing as core growth pillars, with the National Wealth Fund earmarked to support investment in future technologies.
Until then, observers say the sector remains stuck in a holding pattern – promised transformation, but still waiting for the full machinery to be mobilised.
Achievements and innovations in retail and e-commerce, healthcare and pharmaceuticals, food and beverage, automotive, transport & logistics, and more will be celebrated at the Robotics & Automation Awards on 29 October 2025 at De Vere Grand Connaught Rooms in London. Visit www.roboticsandautomationawards.co.uk to learn more about this unmissable event for the UK’s robotics and automation sectors!
