Politics Home Article | Britain risks being left behind in the AI industrial revolution

Spring Park Data Centre

Every new twist in the energy and security crisis facing Britain sharpens the case for the fundamental rewiring of the state promised by Keir Starmer.

Oil price shocks stretch Whitehall budgets. Demand for increased defence spending intensifies. Departments are under pressure to simultaneously make savings and improve public services.

Calls for radical change in the way the government works come from all sides. Ministers and opposition parties want to harness artificial intelligence (AI) and digital tools to boost public sector productivity and make public services more responsive to individuals. Yet much of Whitehall is trying to run AI-enabled, data-driven services on archaic technology.

Departments cannot deliver more for less with systems that waste energy, drain resources and impede modernisation. Legacy IT – outdated and often obsolete technology systems, software, and hardware – blocks the government’s ambitions to modernise public services and build a state that works.

A new report from the Re:State think tank, From legacy to leadership: Upgrading the digital state, shows the scale of the challenge. One in four central government IT systems is now rated high risk, with many dating back decades and repeatedly patched. The government estimates outdated systems cost £45bn a year in lost productivity.

As CEO of Ark Data Centres, a British unicorn providing secure digital infrastructure for public services, I see the consequences daily. Departments are forced to focus on keeping existing systems operational rather than improving them. The result is slower services, higher costs, and growing fragility across the system.

Legacy IT is less secure and more vulnerable to cyber‑attack and prolonged outages. Too often we see years of underinvestment, followed by emergency funding after a failure, then a return to business as usual.

Energy and sustainability are also key issues. Older infrastructure is less efficient than modern alternatives, undermining the government’s net-zero ambitions.

This is not a problem any department can solve alone. When core systems fail, the impact spreads, hitting households, suppliers and frontline services. Four years ago, a record-breaking London heatwave caused failures in two ageing data centres at Guy’s Hospital and St Thomas’ Hospital that shut down clinical IT systems and disrupted patient care. Yet responsibility for fixing these foundations remains fragmented across Whitehall.

This is why Re:State’s recommendations are so welcome. Legacy IT needs to be treated as a cross‑government issue rather than a set of local problems. A Digital Modernisation Taskforce could identify the most critical risks, co-ordinate action across departments and embed prevention measures.

Crown Hosting Data Centres, a joint venture between the Cabinet Office and Ark Data Centres, stores sensitive data for Whitehall departments, public bodies including NHS trusts, local authorities and agencies like the Office for National Statistics in specialist facilities. Crown Hosting estimates the initiative cut costs by a third and electricity consumption by 75 per cent.

Government needs the tools to deliver efficient, reliable and trusted public services. Ministers are beginning to tackle this challenge through their Roadmap for Modern Digital Government and forthcoming Legacy IT Action Plan but need to go further and faster.

Without systemic change, ambitions for an AI-powered state cannot become a reality. Britain risks being left behind during the new global Industrial Revolution.