Shuffling the deck chairs in Whitehall is a classic British political tradition. Every time a new prime minister walks through the door of Number 10, civil servants brace themselves for the inevitable department rebranding, new letterheads, and shifted org charts. But Andy Burnham’s plan to scrap the technology department has hit a wall of intense opposition before he even officially takes the keys to the building.
The incoming prime minister wants to dismantle the Department for Science, Innovation and Technology. Known across the industry as DSIT, this department has been the central hub for the UK's digital ambitions. Burnham's team wants to absorb its responsibilities back into a massive, expanded business department led by Jonathan Reynolds.
It is a risky bet. The tech sector is furious, and senior political figures are openly worried.
The immediate fallout of the Burnham plan
Word leaked out over the weekend that Burnham’s advisers had instructed civil servants to prepare the paperwork to dissolve DSIT. The blowback was instant.
Tech investors, policy advisers, and backbench MPs are calling it a colossal unforced error. Matt Clifford, a prominent AI adviser who has worked closely with both Keir Starmer and Rishi Sunak, did not hold back on social media. He made it clear that dismantling the department at this exact moment is a major error. Technology has evolved from a niche policy area into a foundational pillar of national security and economic productivity. Spending the next six months untangling administrative red tape is a distraction the country cannot afford.
The criticism from inside the tech ecosystem reflects a deep exhaustion with government volatility. Startups and scale-ups need stability. They need predictable regulatory environments to attract venture capital. Absorbing tech policy into a mega business ministry means artificial intelligence, quantum computing, and life sciences will suddenly find themselves competing for ministerial attention with traditional manufacturing, high street retail, and heavy industry.
Dom Hallas from the Startup Coalition put the problem bluntly. He warned that a massive business department forces British tech companies to fight with British steel for political oxygen. A structural overhaul takes months to settle. Teams get moved, reporting lines blur, and decision-making grinds to a halt. When you are dealing with technologies that change completely in the span of a few weeks, a six-month bureaucratic pause is devastating.
Shifting AI oversight to the civil service machine
The proposed restructuring goes beyond simply changing the logo on the front door. The Burnham plan introduces a fundamental shift in how the government intends to govern artificial intelligence inside public services.
Instead of an appointed minister driving the adoption of AI across hospitals, schools, and local councils, the responsibility will reportedly land on the desk of the cabinet secretary, Antonia Romeo.
Moving AI oversight directly into the permanent civil service apparatus changes the dynamic entirely. Proponents might argue that putting a senior civil servant in charge ensures long-term continuity that outlasts political cycles. It removes the temptation for short-term political stunts and allows for steady, programmatic implementation.
But the tech community views this with intense skepticism. Civil service structures are built for risk aversion, not rapid iteration. Ministers possess the political mandate to override bureaucratic inertia, push through controversial reforms, and allocate budgets aggressively. Without a dedicated ministerial champion whose career depends on delivering tech transformation, public sector AI adoption risks getting bogged down in endless committee reviews and impact assessments.
This shift comes at a time when the stakes are incredibly high. Former ministers and foreign policy chiefs have pointed out that AI will dictate international diplomacy and economic competitiveness for the foreseeable future. The previous administration under Keir Starmer famously dubbed AI the defining opportunity of the generation. Walking away from a dedicated department sends a signal to global markets that the UK is downgrading its focus on the sector.
The broader battle for the soul of Labour economics
To understand why Burnham is making this move, you have to look at the wider political and economic strategy he is assembling. The incoming prime minister is preparing to launch his government with a major focus on the immediate pressures facing working-class families. A massive cost of living package targeting housing, energy, and transport costs is expected within days of his arrival.
Burnham’s focus is resolially local, physical, and immediate. His political identity is rooted in tangible public services, regional devolution, and standard industrial strategy. To his team, a standalone tech department can easily look like a vanity project inherited from past administrations. They see a tech sector that captures massive headlines but often fails to deliver immediate, visible wealth redistribution to struggling towns outside London and the Southeast.
There is also growing anxiety about the direction of the UK tech industry. Starmer’s recent tech agreements with major US corporations left some factions within the party feeling uneasy. Critics argue that the British tech sector is dangerously close to becoming a mere subsidiary of Silicon Valley. Tech giants buy up local successes, much like Google acquired DeepMind back in 2014, leaving the UK with the research credentials but little of the long-term corporate wealth.
By rolling technology into Jonathan Reynolds’ business department, Burnham's team likely believes they can better align tech innovation with national economic resilience. They want technology to serve the wider economy, not exist in an isolated bubble.
However, the timing creates a massive headache. Burnham is already dealing with internal party friction over his anticipated cabinet appointments. The expectation that Shabana Mahmood will take over as Chancellor has already raised eyebrows among economists who worry about her alignment with Burnham's aggressive spending priorities. Adding a public war with the technology sector onto his plate before he even takes office complicates his opening week.
The high price of administrative distraction
History shows that machinery of government changes are rarely cheap, and they are never fast. Creating DSIT required massive effort to decouple teams from the old Department for Digital, Culture, Media and Sport and the Department for Business, Energy and Industrial Strategy. Reversing that process now will trigger months of internal friction.
When a department is abolished, the following things happen behind the scenes:
- IT systems must be merged, creating massive compatibility headaches for internal security.
- Human resources teams must renegotiate pay structures, job titles, and reporting hierarchies.
- Legal teams must review existing contracts with software vendors and external consultants.
- Policy work stalls as civil servants focus on securing their positions in the new hierarchy.
While Whitehall managers argue over office space and email domains, international competitors will keep moving. The United States, France, and Germany are pouring billions into tech infrastructure and regulatory frameworks. They are not pausing to rewrite their internal organizational charts.
What the tech ecosystem needs to do next
The next 48 hours are critical. Burnham's team is finalizing their policy layout before Monday's official announcements. If the tech sector wants to save the department, it needs to alter its argument.
Complaining about the loss of a seat at the cabinet table will not move a prime minister focused on regional inequality and working-class living standards. The tech community must demonstrate how digital infrastructure directly solves the problems Burnham cares about.
Instead of talking about abstract AI capabilities, founders and investors need to show how digital tools can lower energy bills, improve the efficiency of the NHS, and create high-paying jobs in regions that have been left behind. The argument must shift from protecting a department to protecting the national economic output.
If the merger goes ahead regardless, the focus must immediately turn to holding Jonathan Reynolds and Antonia Romeo accountable. The industry will need concrete guarantees that tech policy will not be buried beneath the daily crises of traditional business sectors.
The Burnham era is starting with a battle over the structure of government itself. How the incoming prime minister handles this backlash will tell us everything we need to know about how he intends to run the country.
