TL;DR

Government departments, councils and other public bodies have signed 2,129 AI-related contracts worth £5bn between January 2018 and this month, according to Tussell’s procurement tracker. This year has already set a record for total value, and the number of awards looks likely to pass last year’s peak as well. AI still accounts for only about 4% of what the sector spends on IT services and software.

What the tracker counts

The single largest award this year runs to £456m, placed by the Cabinet Office with EY and KPMG to stand up the “National School of Government and Public Service” — a body whose remit is far wider than AI, with digital and AI training folded in. That one deal accounts for roughly 9% of the eight-year total by itself, a useful reminder of how much these headline figures depend on where the boundary of “AI-related” gets drawn.

Palantir and Microsoft lead the supplier ranking, trailed by Hochtief, KPMG and LGC, the government’s chemistry laboratory. Among buyers, the heaviest spenders are the Met Office, the Ministry of Defence, NHS England and DSIT — and the final two on that list are being wound down, so future editions of the tracker will have to trace where those budgets and commitments end up.

The domestic-supplier gap is closing

British-headquartered suppliers have taken just under £2.19bn since 2018 against £2.28bn going to American firms. That £90m gap was closer to £1bn not long ago. For a government that has made tech sovereignty an explicit aim, the trend line matters more than the current standing — though the mix is worth reading carefully, since a large share of the UK-registered total sits with professional services firms rather than with British AI developers.

Why it matters

Public procurement is the most reliable evidence available for how far AI has actually moved into UK administration, because contracts are recorded whether or not a deployment succeeds. The 4% share also sets the story straight: AI spending is growing quickly from a position that remains small next to conventional IT.

Looking forward

The interesting figure in next year’s tracker will not be the total. It will be the renewal rate — how many of these 2,129 contracts get extended once the pilots they funded have been evaluated.