UK's 'buy British' tech ambitions hit reality as less than £1 in £6 stays at home

The UK government's push for "buy British" technology is struggling to materialize, with analysis revealing that less than one-sixth of its biggest tech suppliers' spending stays within the country, a study from the Institute for Public Policy Research (IPPR) shows. While 42.5% of spending with the public sector's top 150 tech firms appears to benefit UK companies, that figure drops to just 15.4% when considering the actual location of those businesses.

Many of these firms are owned overseas, have staff based abroad, or simply resell technology from American giants like Microsoft. In fact, 43% of spending attributed to UK-headquartered suppliers goes to resellers. The US emerges as the biggest beneficiary, with £9.2 billion of the £19.2 billion spent on the largest suppliers. Only 150 companies receive 83% of public sector technology spending, with the top 15 accounting for nearly half.

Smaller suppliers receive only 12% of government technology spending compared to 27% across all government sectors. Competition is also a concern, as 89.9% of government IT contracts in the past year had no published record of how many suppliers bid, making it difficult to assess the competition. When it comes to AI, the government's spending records show little direct money going to companies like OpenAI and Anthropic, but much of the technology is bundled into existing cloud agreements and partnerships.

The report "Locked In: A Realist's Agenda for Digital Sovereignty" warns that Britain's reliance on American technology could be problematic if the US restricts access to advanced AI systems. While the government has committed £500 million to a Sovereign AI Fund, researchers believe more needs to be done, such as negotiating technology contracts as a single customer and collaborating with other countries to secure access to advanced AI.