New changes in UK goverment department structures were announced on Tuesday 21 July 2026, immediately after Andy Burnham became Prime Minister and carried out his first machinery-of-government reshuffle.
The UK Prime Minister, under the Royal Prerogative, typically carries out machinery-of-government changes to reflect new political priorities, support economic or public service reforms, and often to signal a change in direction after an election or when a new Prime Minister takes office.
The Cabinet Office coordinates the practical implementation, while departments transfer budgets, staff, assets and policy responsibilities over the following weeks or months.
Prime Minister Burnham personally confirmed that the Department for Science, Innovation and Technology (DSIT) would be abolished as part of the reorganisation. Historically, the department has often been referred to colloquially as “the department of the future”.
Other announcements made on Tuesday, and subsequently, were that:
- Most of the DSIT’s responsibilities were to be transferred into a new Department for Business, Innovation, Science and Trade (DBIST), led by Jonathan Reynolds MP as Secretary of State.
- Responsibility for AI was “elevated” to the centre of government, with Kanishka Narayan MP joining the Cabinet as AI Minister and taking responsibility for AI policy across government.
- Digital transformation responsibilities are being moved to a strengthened Department for Digital, Culture, Media and Sport (DCMS).
Subsequently, some Ministers have outlined how some responsibilities would be redistributed, when the Cabinet Office published the official Machinery of Government changes: Fact Sheet on Wednesday, detailing exactly where DSIT’s responsibilities would move, and comments made to the press have been centred around the “reshuffle” as a better alignment of technology policy with economic growth.
Widespread Concern Expressed
The reorganisation has prompted strong reactions across the technology sector. The restructuring concerns are largely centred around the fact that key areas and associated industries will now sit within a different departmental structure, which could affect future funding programmes, procurement and technology policy.
Peers in the House of Lords have questioned what will happen to science and technology fundings while the Department for Business, innovation, Science and Trade (DBIST) gets up and running.
Crossbench MP life peer Lionel Tarassenko said:
“Any organisation like this will take 12 months. And 12 months is an eternity in AI. It’s equivalent to three generations of frontier AI models.”
Responding to the debate, the Government sought to reassure Parliament that major AI and science programmes will continue uninterrupted. The AI Security Institute will move into the Office of the Prime Minister and Cabinet, the Sovereign AI Unit will transfer to DBIST, and UK Research and Innovation’s £9.22 billion R&D budget will be maintained.
The debate also highlighted questions over whether the UK’s level of AI investment is sufficient to compete internationally, as ministers insisted AI and emerging technologies remain central to the Government’s economic growth plans.
The choice of choosing to disrupt established structures that perhaps were not entirely needing a refresh in July 2026 will be played out on a global stage shortly. News in the Channel rounds up a few of the views expressed so far: firstly for the dissolution of the DSIT, and then a slightly more positive reaction for the incoming AI minister.
Reaction to the Dissolution of the DSIT
Tony Kounnis, CEO of Face Int UK & Europe, said:
“The start of Andy Burnham’s premiership is inevitably going to trigger a lot of change. However, while attention will focus on how the new PM tackles major economic and social challenges, there are many other policy areas requiring urgent attention, and technology is one, particularly the rapidly advancing facial recognition technology market. That’s why news that he’s considering abolishing DSIT is surprising; it would mark a notable shake-up for the UK’s tech industry.
“As an industry valued at £1.2 trillion, it’s crucial we don’t take our foot off the gas now. Technology, one of the UK’s priority sectors, is vital to economic growth. Any delays to sector investment and policy development caused by the redistribution of DSIT’s responsibilities could be costly.
“With a change in leadership, it’s important that any departmental changes don’t cause further disruption to much-needed progress where the regulation of facial recognition technology (FRT) is concerned. As FRT becomes more widely used by police and businesses, the public has also been voicing concerns around excessive surveillance and what it means for their privacy. People expect FRT to be deployed responsibly and with strong safeguards in place – that has to be the message for Burnham and policymakers.
“Whether by police or in the private sector, the use of FRT should be accompanied by a clear explanation of why it is being used, what problem it is solving and how people’s data is being protected. Amidst the many things in the PM’s in-tray, implementing a plan to bring forward a responsible and progressive approach to FRT regulation must feature on the to-do list; we have to ensure the public’s concerns are respected as the FRT rollout continues at pace.”
Mark Boost, CEO at Civo, has said:
“Merging DSIT into an expanded Department for Business and Trade under Jonathan Reynolds is actually a far more positive move than it might look on the surface. Reynolds knows much of this portfolio inside out from his time as Secretary of State for DBT, and his background across Treasury and business means he understands that tech isn’t just an industry, it’s the foundational engine of economic growth. Crucially, it eliminates the messy overlap that previously existed between DSIT and DBT, making the overall agenda far more straightforward.
The key will be ensuring tech doesn’t get diluted by traditional business priorities. In a fast-moving AI arms race, we cannot afford to lose momentum. But with 90% of IT leaders calling for a more proactive government stance, this unified department has a clean mandate to embed tech sovereignty directly into the UK’s primary economic and industrial strategy.”
Stuart Harvey, CEO of Datactics commented:
“Bringing together DBT and DSIT marks one of the most significant shifts in government departments in recent years, and if the merged department is expected to lead the UK’s approach to AI regulation, it must be built on solid foundations that begin with good data. AI systems respond and generate information from the data they are fed, and if DBIST is shaping national AI policy, it needs to be strengthened in data quality and readiness.”
Sachin Agrawal, Managing Director for Zoho UK commented:
“The merger of DBT and DSIT places huge responsibility on the new DBIST to lead the UK’s AI regulation and innovation agenda which initially was a big concern to the future of the UK technology sector. The growing reliance on US technology providers is sparking a fear that the UK is falling behind, and that this decision further risks turning the UK from an AI leader to a follower.
“However, for DBIST to provide clarity and stability for the industry, it needs teams who understand data science, governance and AI and can translate that knowledge into practical, day-to-day thinking. The UK cannot afford an inconsistent approach to AI and strengthening this capability gives a stronger platform to deliver regulation and support adoption across the economy.”
Andy Ward, SVP International at Absolute Security commented:
“AI is becoming one of cybersecurity most valuable tools, especially with the rise and intelligence of AI creating a sophistication for cyber threats that make it impossible for businesses to avoid. The UK’s cybersecurity strategy should go hand in hand with its AI strategy. As AI progresses, so too should the country’s approach to cybersecurity, in order to remain truly cyber resilient.”
Reaction to the AI Minister Position and Appointment
Matt Harris, SVP and Managing Director UKIMEA HPE
“I’m delighted to see the AI Minister invited to attend the Cabinet. It shows that the government is serious about grasping the game-changing opportunities offered by the rapid development of AI. The UK has momentum and DSIT has been driving initiatives that are key to our international competitiveness. Aligning technology and AI investments with the team responsible for UK industry and economic growth could boost this further. However, departmental reorganisations could create uncertainty at a crucial time and must not be allowed to stall the important work that had already been started by DSIT.”
Charles Hipps, Founder and CEO of recruitment technology company Oleeo, said:
“Giving the AI minister a seat at Cabinet is significant, but the appointment will be judged on whether employers notice any practical difference. Businesses are already using this technology. What many still lack is clear guidance on how to use it when the outcome affects an employee, a job applicant or a customer.
“Kanishka Narayan is not new to the brief, so there should not be a lengthy settling-in period. His greater authority should be used to deal with the questions businesses are facing now, rather than producing another broad statement about the potential of AI. The latest ONS figures show that adoption has already moved ahead of implementation. AI use among businesses with 10 or more employees has almost tripled since late 2023, but only one in ten adopting businesses say it is used extensively. Just 11% say most of their workforce has received AI-related training.
“That is a fairly stark gap. Companies have bought tools and employees have started experimenting with them, but many organisations have not done the less exciting work of setting rules, training people and deciding who remains responsible when something goes wrong. Recruitment exposes that problem very quickly because the decisions are personal. Employers need to know when a candidate should be told that AI has influenced an assessment, how the output has been checked and what happens when somebody believes the decision is wrong. Saying that a human remains ‘in the loop’ is not enough if that person does not understand the system or is simply approving whatever it recommends.”
“Jonathan Reynolds’ expanded brief should help connect AI policy with the pressures businesses are actually dealing with, including productivity, workforce planning and skills. But government should not assume that publishing more guidance automatically solves the problem. Smaller employers may not have legal teams, AI specialists or dedicated governance functions. They need usable standards, not another hundred-page document. Lisa Nandy’s digital responsibilities also matter because public confidence will put a limit on adoption if people feel important decisions are being made about them by systems they cannot question. That applies just as much to hiring as it does to other public-facing uses of AI.
“The appointments place AI closer to the centre of government, but that alone is not an achievement. The test is whether employers get clearer answers on transparency, training and accountability. At the moment, too many are being told to adopt AI without being shown what responsible adoption looks like in practice.”
Mark Boost, CEO at Civo, has said:
“Any Whitehall restructuring brings administrative friction, and because the global tech and AI arms race is moving so quickly, the UK simply cannot afford a pause. Critical initiatives like the AI Opportunities Action Plan and sovereign infrastructure investments must be ring-fenced from bureaucratic delays.
“Giving the AI minister direct access to cabinet decisions demonstrates that the government recognises AI’s existential importance to our future economy. Positioned inside a high-powered business and trade department, an AI Minister with Cabinet authority will have real leverage to break down cross-Whitehall silos, accelerate national AI infrastructure, and give British tech companies the proactive backing needed to maintain a competitive global advantage.”
In conclusion..
The strong message, from those in the technology sector that have offered comments and observations this week, is that the success of the government’s Whitehall reorganisation will depend on execution rather than structure.
While the fear that the abolition of the DSIT could delay investment is palpable, others believe integrating technology into the UK’s wider industrial strategy could strengthen its role in driving economic growth.
Several industry leaders stressed that the Government must avoid delaying AI policy and technology regulation during the departmental transition. They called for clear, practical frameworks covering AI governance, data quality, cybersecurity and facial recognition, warning that businesses need consistent guidance and responsible regulation to maintain the UK’s competitiveness while supporting innovation and public trust.
Whilst there is broad consensus that momentum must not be lost, momentum has certainly been knocked by the announcements, if just by a week, or much more.
Industry has welcomed giving the AI Minister a seat at the Cabinet table, but stressed that the appointment will ultimately be judged by practical action, clearer guidance for businesses and faster delivery rather than organisational change alone.
Time will tell, but perhaps a few UK organisations cannot wait that long, and given the vote, they may not have voted for as much disruption or delays.
On a broader front, commentary from the technology sector has an undertone of impatience. The government appeared to do its “own marking” of the one year assessment on its AI Opportunities Action Plan at the end of January this year.
As of the latest Government update, there is no published list of startups or AI vendors that have received funding through the AI Accelerator Tenders process. The named public-sector participants are MHCLG and i.AI, but the successful suppliers have not been disclosed. The Government has demonstrated the new procurement model with a live planning AI project, but has yet to publish which UK AI companies have benefited from the faster procurement route.
A little less shuffling, a little less conversation, and a little more action please.
