LONDON — To its fans, it is the “Department of Cool,” the embodiment of a tech startup. To its skeptics, the U.K.’s newly-minted Department for Science, Innovation and Technology is a rearranged deckchair trying to find its place in a beleaguered government.
A flagship initiative of Rishi Sunak’s premiership, the new department — DSIT as it quickly became known in Westminster — is in charge of a major program of tech regulation. It has been welcomed by industry and appears to be the embodiment of the government’s much-heralded promise to turn Britain into the “world’s next Silicon Valley.”
But nearly three weeks since the department’s creation and officials are still spread across different offices; responsibility for Ofcom — the regulator enforcing upcoming online content rules — is unclear; and funding and staffing questions remain unresolved.
Meanwhile, one of its key pieces of legislation, the Data Protection and Digital Information Bill, is now likely to sit in the long grass until the next parliamentary session, insiders say.
Critics allege DSIT is emblematic of Sunak’s technocratic instincts and the disruption it creates risks wasting valuable government time as the next election approaches. A range of reforms to online safety and digital competition regulation are already underway but if the prime minister wants to leave his mark before voters go to the polls, DSIT will need to scramble to get pro-innovation legislation ready for the King’s Speech later this year, the mechanism by which U.K. governments set out legislative plans for the next parliamentary session.
“[Sunak’s] tinkering risks delaying key pieces of legislation to grow our economy by driving competition and innovation in digital markets to help consumers and small businesses, to replace GDPR with a British data protection regime, and to safeguard and promote British broadcasters in the streaming age,” said Lucy Powell, Labour’s shadow secretary of state for digital, culture, media and sport. “All this vital legislation has been long promised but not delivered.”
Teething problems
Ministers and senior civil servants were quickly appointed, coming across from the now defunct Business department (BEIS) and the trimmed down Department for Culture, Media and Sport (DCMS).
But that was the easy bit. Most science and innovation officials still sit in the old BEIS department on Victoria Street, while the secretary of state, Michelle Donelan, is in her former DCMS office in Whitehall, leaving the department without a physical home for now.
A move to new offices in the old Admiralty buildings is expected this summer. “The sooner we get into a new building the better,” a senior figure in the department said, speaking on condition of anonymity so they could talk openly.
Some staff are also still working on old email addresses, which need porting as BEIS staff used Microsoft while DCMS was on Google.
Directors are regularly summoned over to Whitehall, with a weekly meeting of departmental directors slated each Monday in a bid to keep the communications lines flowing.
Dom Hallas, from startup lobby group Coadec, which is close to the government, said “teething problems” were to be expected, but he welcomed the bringing together of research and development money from BEIS and competition policy from DCMS into one department. “There was always a need to have a clearer voice in Whitehall and I’m seeing that already in the conversations I have had,” he said.
The senior figure at DSIT added: “It genuinely feels like a start-up department, which in a way doesn’t feel like a bad thing.”
“If there’s going to be a department that has got whiteboards and Post-It notes, and everyone standing by the watercooler, it’s the department for Science, Innovation and Technology. It needs fresh thinking,” they added.
The department has around 400 officials working on science and innovation, with George Freeman, minister of state and Donelan’s number two, in charge of that area. Jo Shanmugalingam is acting as director general.
Former DCMS technology officials continue to work on regulating the digital economy, led by director general Susannah Storey, but overall exact DSIT staffing levels haven’t been finalized.
The permanent secretary — the top civil servant in charge of the new department — is Sarah Munby, a former McKinsey economist, described by colleagues as a “real doer.”
A Whitehall official said there are plans to beef up expertise in the department by bringing in outside talent, including scientists on secondment. There are also plans to hire a “chief technology adviser” to work alongside officials.
The official quoted above also said plans are being drawn up to give Donelan a role in assessing what is being spent on research and development across departments as they look at how the taxpayer can get “bang for its buck.”
Powerful neighbours
Crucial to DSIT’s success will be buy-in from its neighbour, the Treasury.
Chancellor Jeremy Hunt’s budget on March 15 is a key barometer of just how serious No. 10 and No. 11 are about the department.
“The good news is we are now plugged into the Treasury, No. 10,” the senior DSIT figure said. “The PM, chancellor and [Secretary of State at the Cabinet Office] Oliver Dowden see this department as their vehicle.”
A government spokesperson said they were “rapidly working through details of the department’s budget.”
BEIS’s budget dwarfed that of DCMS meaning the new department could receive billions of pounds in research funding. This is what the tech industry is eyeing as it could mean more cash for innovative research in the sector. As soon as the department was formed, trade body, techUK, highlighted BEIS’s R&D budget of £20bn a year which would be looking for a new home.
Temporarily based at the back of the Treasury building, some DSIT officials share a canteen with those working in the finance ministry, although one new inhabitant lamented that unlike their Treasury colleagues, they have to scuttle in the back entrance with staffers from DCMS and HMRC officials, rather than march in the grand Treasury front door which looks out onto the historic St James’s Park.
Challenges ahead
The department’s officials and ministers are focused on three major pieces of the government’s legislative agenda.
The Online Safety Bill is expected to return to the House of Lords next month, while the Digital Markets, Competition and Consumer Bill, which was due last year, is coming “this session as soon as parliamentary time allows,” a government spokesperson said.
The spokesperson sounded a more cautious note on the Data Protection Bill which they said, “remained a commitment” and would “continue its passage in due course.”
It is now unlikely to come this parliamentary session, which is expected to end this autumn, minister Paul Scully said at an event organized by think tank Demos last week. “We’ve got a hell of a lot of legislation to get through,” the senior DSIT figure said.
Meanwhile, an AI white paper, quantum strategy and semiconductor strategy are also overdue.
A government spokesperson said the semiconductor strategy would be published “as soon as possible,” while the AI white paper was also coming “soon.” They said a quantum strategy will come “shortly.”
Beyond policy delays, it is also unclear where some responsibilities lie. Ofcom, which will regulate the Online Safety Bill, appears caught between DCMS and the new department.
When Labour MP Chi Onwurah asked DSIT where Ofcom will report to, junior minister Paul Scully replied last week, “work is ongoing.” “Total shambles,” Onwurah tweeted in response.
And it is not just responsibility for regulators that is yet to be finalised. There are also questions about where overall responsibility for the Online Safety Bill lies, techUK said. In the Commons it is led by DSIT, but in the Lords it is sponsored by DCMS.
One industry representative, who asked not to be named so they could speak openly, said: “Our impression is the ministers got strapped in quickly and have been out and about. The teams around the bills have also just got on with it, but there are question marks over who is doing what.”
They added it was too early to say if the reorganization would further delay the long list of work on the department’s plate.
Alex Thomas, program director at the Institute for Government, said that while his think tank was “generally skeptical” about machinery of government changes because of the cost of the disruption, he was willing to give Sunak’s plans the benefit of the doubt, conceding they “may well turn out to be positive.”
“It might end up being a sustainable good thing, but it will require quite long-term political commitment to it,” he said.
