DSIT annual report and accounts 2025 to 2026 · first published 14 July 2026
This is the Department for Science, Innovation and Technology's (DSIT's) annual report for the financial year ending 31 March 2026. It is primarily an accountability document — not a procurement policy note — but it is packed with strategic signals that matter to small businesses bidding for public work or research funding. The report confirms a record £86 billion in public R&D spending over four years (2026–27 to 2029–30), with DSIT controlling £58.5 billion of that. It announces flagship programmes in AI, quantum computing, cyber security, digital skills, and public-service modernisation, many of which will procure from industry. New legal requirements on cyber security suppliers and online platforms also take effect, which could affect SMEs in those supply chains. The document covers central government (DSIT and its arm's-length bodies) and does not set procurement evaluation criteria directly, but it reveals where money is flowing and what government will buy.
WHO THIS APPLIES TO
THE ENKII VIEW
For SMEs, this report is best read as a forward procurement map: quantum, AI infrastructure, cyber security, digital skills training, and public-service digitisation are the funded growth areas, and the contracts and grants to follow will be substantial. The new Cyber Security and Resilience Bill creates a compliance obligation for "critical suppliers and IT service providers," meaning cyber-specialist SMEs that can meet robust security standards and rapid incident-reporting are well positioned for both direct contracts and supply-chain roles. The £187 million TechFirst programme and the AI Skills Boost initiative are explicitly delivery-focused, suggesting procurement of training and content providers — a realistic opportunity for specialist small firms in edtech and digital skills.
1. Register interest in DSIT's ProQure programme and monitor Contracts Finder and Find a Tender for quantum computing procurement opportunities — the government has committed over £500 million in quantum R&D and a world-first commitment to procure large-scale quantum computers by the early 2030s.
SMEs in quantum computing hardware, software or integration — The report confirms a world-first government commitment to procure large-scale quantum computers by the early 2030s, backed by up to £2 billion, with the ProQure programme explicitly designed to work with industry suppliers.
2. Review your incident-reporting procedures and security standards now against the Cyber Security and Resilience Bill requirements — and position these capabilities prominently in tender responses and capability statements.
Cyber security SMEs supplying or seeking to supply essential public services — The Bill, introduced to Parliament in November 2025, will require critical suppliers and IT service providers to meet robust security standards and report incidents promptly, with tougher penalties for breaches. Early compliance readiness is a differentiator.
3. Monitor DSIT and UKRI procurement channels for TechFirst and AI Skills Boost delivery opportunities — the four TechFirst strands (TechYouth, TechGrad, TechExpert, TechLocal) suggest multiple distinct contract lots likely to suit specialist small providers.
Digital skills training providers and edtech SMEs — The £187 million TechFirst programme and the AI Skills Boost initiative (targeting 10 million workers by 2030) are government–industry delivery programmes that will require contracted providers across schools, communities, and specialist training.
4. Actively pursue DSIT's AI Growth Zone and Sovereign AI Unit pipelines — and build a clear evidenced case for how your AI product or service contributes to productivity or public-service efficiency, as these are the metrics government is tracking.
SMEs in AI tools, software or consultancy — The Sovereign AI Unit is backed by up to £500 million and the report confirms cross-government AI tools (Consult, Redbox, Extract) are in active use, signalling ongoing appetite for proven AI products that save staff time and cost.
5. Track Project Gigabit and Shared Rural Network contract lots via Contracts Finder — the report confirms ongoing rollout, including a £157 million Scotland contract, with DSIT committed to further national coverage targets.
Broadband and connectivity infrastructure SMEs — DSIT confirmed continued rollout of gigabit-capable broadband and rural mobile coverage under Project Gigabit and the Shared Rural Network programme, representing active procurement of connectivity infrastructure delivery.
6. Explore the Life Sciences Innovative Manufacturing Fund (LSIMF) and the Health Data Research Service for funding and contract opportunities — the sector plan is backed by over £2 billion and has already unlocked more than £560 million in public/private investment through LSIMF alone.
Life sciences and health-tech SMEs — The Life Sciences Sector Plan, backed by over £2 billion, is an active delivery programme with confirmed funding flows and a stated ambition to make the UK Europe's leading life sciences economy by 2030.
7. Align your R&D funding applications to DSIT's revised 'outcome-focused framework' — demonstrating how your research supports economic growth and government priorities, not just academic excellence, as UKRI's mission has been explicitly reset to this focus.
SMEs applying for ARIA or UKRI research funding — The report states DSIT has 'introduced a new outcome-focused framework for how [UKRI] invests, aligning public R&D more closely to the country's research and growth priorities' — applications that speak growth and impact language are better positioned.
8. Engage with the Regulatory Innovation Office (RIO) and apply to future rounds of the Regulators' Pioneer Fund — the RIO's mandate is explicitly to cut red tape for frontier technology businesses in these four priority sectors.
Frontier technology SMEs in space, drones, engineering biology, or AI in healthcare — The RIO awarded £8.9 million through the Regulators' Pioneer Fund in its first year, focused on space, drones and autonomous technology, engineering biology, and AI in healthcare — directly benefiting SMEs in these sectors facing regulatory barriers.
Every rule below quotes the official document verbatim.
DSIT controls £58.5 billion of the government's £86 billion four-year public R&D budget (2026–27 to 2029–30), with annual investment peaking at £22.6 billion in 2029–30. (DSIT-funded R&D programmes, 2026–27 to 2029–30)
“DSIT's R&D budget is £58.5 billion. This provides the investment needed to protect curiosity-driven research, support the government's priorities, and scale and grow innovative companies.”
UK Research and Innovation (UKRI) will receive an expected £38.6 billion from DSIT's budget over the four-year settlement. (UKRI grants and programmes, 2026–27 to 2029–30)
“From DSIT's R&D budget, UKRI will deliver an expected £38.6 billion on behalf of DSIT e.g. on critical technologies.”
The Advanced Research and Invention Agency (ARIA) receives a total of £1.2 billion to fund high-risk, high-reward research. (ARIA, 2026–27 to 2029–30)
“DSIT's budget also includes a total of £1.2 billion for the Advanced Research and Invention Agency (ARIA) to grow and invest in high-risk, high-reward research.”
The government has committed up to £2 billion to maintain UK leadership in quantum technologies, including a world-first commitment to procure large-scale quantum computers by the early 2030s. (Quantum technologies procurement and R&D, central government, early 2030s target)
“It invests up to £2 billion to cement the UK as a world leader in quantum technologies – this includes a world-first commitment to procure large scale quantum computers by the early 2030s.”
The ProQure programme will work with industry to build, validate, and scale integrated quantum hardware and software solutions, backed by over £500 million in quantum computing R&D. (Quantum computing industry suppliers, central government programme)
“It invests over £500 million in quantum computing research and development – this includes our ProQure programme to work with industry to build, validate, and scale integrated hardware and software solutions.”
The Sovereign AI Unit is backed by up to £500 million to support cutting-edge British AI firms. (AI sector firms, central government, from November 2025)
“we established the Sovereign AI Unit in November 2025, backed by up to £500 million”
The £187 million TechFirst programme supports digital and AI skills from school to specialist training, aiming to reach 400,000 children from disadvantaged backgrounds. (Digital and AI skills training providers, all sectors)
“The government launched the £187 million TechFirst programme to bring digital skills and AI learning into classrooms and communities. We aim to reach 400,000 children from disadvantaged backgrounds.”
The AI Skills Boost programme aims to upskill 10 million UK workers in AI skills by 2030. (AI training and skills providers, government–industry initiative)
“DSIT launched AI Skills Boost. This is a government–industry initiative to upskill 10 million UK workers in AI skills by 2030.”
The £54 million Global Talent Fund recruits leading researchers to the UK, delivered through 12 universities and research institutions. (Research institutions partnering with DSIT)
“DSIT announced a new £54 million Global Talent Fund, to recruit the world's top researchers to the UK. It is delivered by 12 UK leading universities and research institutions.”
The Cyber Security and Resilience Bill requires critical suppliers and IT service providers to meet robust security standards and report cyber incidents promptly, with tougher penalties for breaches. (Critical suppliers and IT service providers to essential public services; Bill introduced to Parliament November 2025)
“The bill will require critical suppliers and IT service providers to meet robust security standards and report incidents promptly, with tougher penalties for breaches.”
The Government Cyber Action Plan is backed by £210 million and sets expectations for how government should identify, manage and respond to cyber risks. (Government cyber security suppliers and public-sector cyber resilience, from January 2026)
“The £210 million-backed Government Cyber Action Plan published in January”
Online platforms must implement secure age verification, block direct messages from strangers to children, and ensure data privacy during age checks; Ofcom can levy penalties of up to £18 million or 10% of global revenue for breaches. (Online platforms in scope of the Online Safety Act, from August 2025)
“Ofcom has been empowered to enforce compliance, with penalties of up to £18 million or 10% of global revenue for breaches.”
The Life Sciences Sector Plan is underpinned by more than £2 billion in government funding and aims to make the UK Europe's leading life sciences economy by 2030. (Life sciences sector suppliers and researchers)
“It aims to position the UK as Europe's leading life sciences economy by 2030. It is underpinned by more than £2 billion in government funding.”
The Regulatory Innovation Office (RIO) awarded £8.9 million through the Regulators' Pioneer Fund to deliver pro-innovation regulation across four priority sectors: space, drones and autonomous technology, engineering biology, and AI in healthcare. (Frontier technology businesses in space, drones, engineering biology, and AI in healthcare)
“It awarded £8.9 million through the Regulators' Pioneer Fund to deliver more effective, pro-innovation regulation.”
DSIT rolled out a £157 million contract to deliver gigabit broadband to around 65,000 homes and businesses in Scotland's most remote areas. (Broadband connectivity suppliers, Scotland rural rollout)
“DSIT rolled out a £157 million contract to deliver lightning-fast broadband to around 65,000 homes and businesses in Scotland's most remote areas.”
DSIT announced a strategic partnership with Google Cloud to upskill up to 100,000 civil servants in digital and AI by 2030 and modernise government IT systems. (Government digital and cloud suppliers, central government, from June 2025)
“In June 2025, DSIT announced a strategic partnership with Google Cloud. It aims to modernise outdated government IT systems and upskill up to 100,000 civil servants in digital and AI by 2030.”
The National Timing Centre programme is backed by £180 million, with an additional £71 million for a UK eLoran programme to provide a ground-based backup for positioning, navigation and timing. (Position, navigation and timing technology suppliers, central government)
“DSIT launched the £180 million National Timing Centre programme to provide a secure, terrestrial timing signal to protect vital digital services from satellite disruption. This has been complemented by £71 million to establish a UK eLoran programme.”
The government has set a target for 10% of civil servants to work in digital, data and technology roles by 2030. (Digital skills and workforce development programmes, central government, target by 2030)
“The government has set a target for 10% of civil servants to be working in digital, data and technology roles by 2030.”
UK business adoption of AI more than doubled in two years, rising from 10% in January 2024 to 25% in January 2026, with large firms (250+ employees) at 44% and micro-businesses at 24%. (All UK businesses; ONS data)
“UK business adoption of AI more than doubled over 2 years, increasing from 10% in January 2024 to 25% in January 2026.”
This briefing is enkii's interpretation of the official document — the official text always governs.
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