The UK government's finance systems are unable to produce reliable annual figures showing how much departments and public bodies invest in digital transformation, according to an official response to the Science and Technology Committee published this week. Officials acknowledged they cannot deliver "consistent, reliable and comparable data across departments" despite agreeing in principle that such transparency would be valuable. The admission comes after the committee's June report flagged fragmented spending and the absence of a coherent strategy for building a digital state.
While the UK public sector allocates more than £26 billion each year to digital technology, that figure represents only a rough estimate without any comparable breakdown by department, the government response noted. Current finance infrastructure doesn't support the kind of detailed tracking needed to publish annual data on digital and data-driven expenditure, officials said. The government described greater transparency as "a direction of travel" and pledged to collaborate with HM Treasury on developing such capabilities over time, though it stopped short of committing to a timeline.
Committee chair Dame Chi Onwurah, scheduled to address Parliament on Thursday, criticized the opacity. "At a time when ministers are asking taxpayers to fund significant investment in technology, it's concerning that they cannot show where the money is going or how value for money is being measured," she said. The government dissolved the Department for Science, Innovation and Technology over the summer, distributing its duties among the Department for Digital, Culture, Media and Sport, the Cabinet Office, and the newly formed Department for Business, Innovation, Science and Trade. Onwurah argued that this restructuring "has only highlighted concerns about who is responsible for driving digital transformation across government."
The lack of spending visibility matters because ministers are simultaneously requesting substantial public investment in technology while being unable to demonstrate where funds flow or whether they deliver value, the committee emphasized. Without centralized oversight following DSIT's abolition, responsibility for digital transformation has become diffused across multiple departments, raising questions about accountability and coordination. The committee also pressed the government to terminate Palantir's involvement in the NHS Federated Data Platform, citing sovereignty worries and vendor lock-in risks tied to £60 million in earlier no-competition contracts. Officials said they'd review the FDP contract using standard processes to decide whether to activate an optional two-year extension, but the response didn't promise an early exit and noted that any termination must follow contractual terms and procurement law.
The government committed to building a strategy for reducing vendor lock-in and strengthening internal capacity, a move Onwurah welcomed while urging ministers to "go further by exercising the break clause in its FDP contract and take steps to reduce our dependence on a small number of large US tech firms." Officials assured that if Palantir's contract isn't extended, built-in controls would support service continuity and protect patient care during any transition. Palantir maintains its technology offers strong value and boosts NHS efficiency. For a government promising digital modernization at scale, the inability to even measure current spending reveals how far basic fiscal infrastructure lags behind ambition. When accountability mechanisms remain this opaque, taxpayers have little reason to trust that billion-pound commitments will translate into tangible public benefit rather than vendor enrichment.