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<h3>DTAC Reform: Simplifying Digital Assurance in the NHS</h3>The NHS’s Digital Technology Assessment Criteria (DTAC) framework has been updated following a multi-year review led by NHS England and the Department of Health and Social Care (DHSC). The revised framework introduces an updated assessment form and accompanying guidance designed to simplify digital assurance processes while maintaining strong standards for patient safety, data protection and interoperability. While the latest changes focus on improving the usability of the current framework, they also signal the beginning of a broader reform programme aimed at modernising how digital health technologies are assessed and adopted across the NHS.<h3>A Framework for Safe Digital Innovation.</h3>DTAC- the Digital Technology Assessment Criteria- provides the NHS’s national baseline for assessing whether digital health technologies meet the requirements necessary for deployment within health and care settings. The framework brings together a range of mandatory standards covering areas such as clinical safety, cybersecurity, data protection, interoperability and usability. By consolidating these requirements, DTAC aims to create a clearer and more consistent process for evaluating digital health technologies. As Sam Tallents from NHS England’s Transformation Directorate explained: “DTAC is the Digital Technology Assessment Criteria. It's an assessment framework that brings together all of the mandatory standards and policy requirements that the NHS has for using digital health technologies in the NHS.” While responsibility for adopting technologies and managing associated risks ultimately sits with local NHS organisations, DTAC provides a common structure that helps ensure those assessments are carried out consistently across the health system. The framework also provides suppliers with greater clarity about what is required to bring digital products into NHS environments.<h3> Responding to Industry and NHS Feedback.</h3>The latest DTAC update follows several years of engagement with industry and health system stakeholders. Feedback highlighted that although the framework played an important role in digital assurance, aspects of the process had become difficult to navigate. Suppliers in particular pointed to overlapping requirements across multiple regulatory and assurance processes, which could create confusion and increase administrative burden. Rebecca, who co-led the DTAC review alongside colleagues from NHS England and DHSC, explained that the latest update focuses on simplifying the framework while maintaining its core safeguards. “We’ve produced an update on DTAC a couple of weeks ago. So that is both an updated form and updated guidance to accompany the form.” The revised documentation introduces a streamlined assessment form and clearer guidance intended to make the process easier for both suppliers and NHS organisations.<h3> Making the Framework Easier to Use</h3>The immediate reforms focus on improving the usability of DTAC within the existing assurance model. Key changes include: - Simplifying and updating the DTAC assessment form - Removing duplicated or outdated requirements - Clarifying how specific standards apply to different types of digital &nbsp; &nbsp; technologies - Improving links to supporting guidance and relevant standards Tallents described these changes as initial improvements designed to streamline the current process. “These are some initial changes just to streamline the existing process, make things a little bit easier to navigate and remove and update some of the requirements.” While these updates are relatively targeted, they address several practical challenges identified by suppliers and NHS organisations using the framework.<h3> A Longer-Term Vision for Digital Assurance</h3>Alongside these interim improvements, policymakers are also considering more fundamental changes to how digital health technologies are assured in the NHS. One option currently being explored is a move towards a certification-based approach to digital assurance. Such a model could provide suppliers with a clearer national route for demonstrating compliance with NHS requirements. Tallents noted that this concept remains under development as part of the broader reform programme. “Longer term, we’re looking at some more substantive reforms… we’ll be looking to move to more of a certification-based approach.” A certification model could potentially reduce duplication across local procurement processes and create a more scalable approach as the volume of digital health technologies continues to grow.<h3> Navigating Regulatory Complexity</h3>The discussion around DTAC reform also highlighted the complexity that can arise when multiple regulatory frameworks apply to the same technology. Digital health products may be subject to medical device regulation while also needing to comply with clinical safety standards and NHS digital assurance requirements. Participants noted that interpreting how these frameworks interact can sometimes be challenging, particularly where technologies fall into regulatory grey areas. Tallents acknowledged that applying these rules in practice can quickly become complicated. “The application rules get very complicated very quickly… which is probably not an ideal situation to be in.” Where a product is fully covered by medical device regulation, the regulatory process is intended to provide assurance around patient safety. However, officials recognised that determining when this applies can require careful judgement.<h3> Clarifying the Scope of DTAC</h3>One important clarification from the discussion concerned the relationship between DTAC and medical device regulation. Technologies regulated as medical devices do not automatically fall outside the scope of DTAC. Instead, applicability depends on how the product is intended to be used and how it interacts with NHS systems. Rebecca emphasised that DTAC continues to apply in many cases because it addresses broader requirements beyond clinical safety. “It isn’t the case that if products have medical device regulation, then they automatically fall out of the scope of DTAC.” This ensures that digital technologies used in the NHS meet system-wide expectations around cybersecurity, interoperability and data governance.<h3> Improving Guidance and Transparency.</h3>To help suppliers navigate these complexities, the updated DTAC documentation includes clearer links to supporting guidance and related standards. In particular, the guidance now provides more direct access to step-by-step information on applying clinical safety standards, which had previously been less visible. Tallents noted that the documentation will continue to evolve alongside changes to relevant standards. “There is also step-by-step guidance on the application of the DCB standards, and we've linked to that more clearly in the document that we hadn't done previously.” By improving access to guidance and clarifying how standards apply, the updated framework aims to reduce uncertainty for suppliers entering the NHS market.<h3> Supporting the Next Phase of NHS Digital Transformation.</h3>Digital technologies are playing an increasingly central role in healthcare delivery, from remote monitoring tools to AI-enabled diagnostics and digital therapeutics. Ensuring that these technologies are safe, secure and interoperable is essential to building trust in digital health innovation. The latest DTAC updates represent an effort to strike the right balance between maintaining robust assurance standards and enabling innovation to move more quickly through the health system. While further reforms are expected as the programme develops, the current changes signal a clear intention to make digital assurance processes more transparent, consistent and easier to navigate for both suppliers and the NHS. As digital transformation continues to accelerate, frameworks like DTAC will remain critical to ensuring that innovation is introduced safely and effectively across the health service.

DTAC Reform: Simplifying Digital Assurance in the NHS

dices and pawns isolated on a white background

Across Europe and the United Kingdom, gambling regulation is entering a period of profound change. Governments are tightening consumer protection rules, introducing new product restrictions and increasing gambling taxes. These measures reflect legitimate concerns about gambling harm and the need for stronger safeguards in digital markets. Yet they are also reshaping the economics of the industry in ways that policymakers are still beginning to understand.The challenge for governments is that gambling policy now sits at the intersection of public health, digital regulation and fiscal policy. The industry is both a potential social risk and a significant contributor to national treasuries through gambling duties, corporate taxation and employment. If regulatory and fiscal pressure becomes too intense, the unintended consequence may be the erosion of the regulated market itself. <h3>The UK’s regulatory transformation </h3>The United Kingdom has emerged as the most influential regulatory testing ground following reforms to the framework established under the Gambling Act 2005. The government’s policy agenda, outlined in the white paper High Stakes: Gambling Reform for the Digital Age, introduces several structural changes designed to reduce gambling harm in online markets.Among the most visible reforms are online slot stake limits, which cap bets at £5 per spin for players aged 25 and over and £2 for those aged 18–24. These limits target products that allow rapid and continuous betting cycles, which regulators believe carry higher risks for consumers.Another major reform is the introduction of financial risk checks, often referred to in industry discussions as affordability checks. Operators will be required to assess whether a customer’s gambling behaviour could cause financial harm, potentially triggering interventions or restrictions.The UK is also introducing a statutory gambling levy, replacing a voluntary system of industry contributions. The levy will fund research, prevention and treatment programmes and is expected to raise around £100 million per year.Taken together, these reforms represent a significant shift in regulatory philosophy. Gambling companies are no longer simply providers of licensed products; they are increasingly expected to monitor consumer behaviour and intervene when risks emerge. <h3>Rising taxes across Europe </h3>At the same time that regulation is tightening, many European governments are increasing gambling taxes.The Netherlands has already begun raising its gambling tax rate from 30.5 percent of gross gaming revenue to over 34 percent, with further increases planned. Sweden has raised its tax rate from 18 percent to 22 percent, while France has increased several levies on online betting and gaming operators.For finance ministries, gambling taxes are an attractive policy tool. The industry generates visible revenues and taxing it can be politically easier than raising income or consumption taxes. However, the economic dynamics of gambling markets are more complex than the simple assumption that higher rates will always produce higher revenues.When taxes rise sharply, operators often respond by reducing promotional spending, offering less competitive odds or slowing investment in regulated markets. These adjustments can reduce the attractiveness of legal platforms relative to offshore operators that are not subject to the same rules or taxes. <h3>The growing risk of the black market </h3>The most significant long-term risk for European regulators is the expansion of the gambling black market. A central objective of modern gambling regulation is channelisation ensuring that the majority of gambling activity occurs within licensed and regulated operators.When channelisation is high, governments benefit in several ways. Consumer protection standards apply, financial transactions can be monitored for fraud and money laundering, and gambling activity generates tax revenue. If channelisation falls, these benefits disappear.Several European markets already illustrate the consequences of regulatory imbalance.In Germany, the introduction of strict deposit limits, advertising restrictions and relatively high taxes following the 2021 Interstate Treaty on Gambling has been widely criticised for pushing consumers toward unlicensed platforms. Industry estimates suggest that a significant portion of online gambling activity now occurs outside the regulated system.The Netherlands has experienced similar concerns following tax increases and tighter regulatory requirements introduced after its online gambling market opened in 2021. Analysts have warned that rising taxes may undermine the competitiveness of licensed operators, potentially increasing the share of activity taking place in unregulated markets.Even in Sweden, which initially achieved strong channelisation after regulating its online market in 2019, regulators have acknowledged that a substantial proportion of online gambling traffic is now directed toward unlicensed sites.These cases highlight a fundamental policy dilemma. Measures designed to strengthen consumer protection may inadvertently encourage players to migrate toward platforms where no protections exist at all. <h3>Policy signals: what governments are planning next </h3>Across Europe, governments have already indicated that the current round of gambling reforms is unlikely to be the end of regulatory change. Instead, many countries are moving toward stricter controls on advertising, higher taxation of online gambling and stronger enforcement against unlicensed operators.In the United Kingdom, the next phase of reform centres on implementing the remaining elements of the government’s gambling review. This includes the rollout of financial risk checks for online players and the introduction of a statutory gambling levy to fund research, prevention and treatment programmes. The Treasury is also examining the possibility of restructuring gambling duties, potentially merging several existing taxes into a single remote gambling tax that reflects the convergence of betting and casino products on digital platforms.Several EU countries are pursuing more restrictive policies. Italy has implemented one of the most stringent approaches in Europe through its Dignity Decree, which introduced a near-total ban on gambling advertising and sponsorship. Spain has imposed strict advertising rules limiting gambling advertising to late-night hours and restricting the use of celebrity endorsements and sports sponsorship. Meanwhile Belgium and the Netherlands have introduced significant restrictions on gambling marketing and are tightening rules around sponsorship in sports.Fiscal policy is also evolving. Countries such as Romania have raised gambling taxes significantly, increasing the tax on online gambling operators to roughly 27 percent of gross gaming revenue, while other European governments continue to review similar increases as part of wider fiscal policy debates.At the same time, regulators are increasingly focusing on enforcement against illegal operators. In Germany, the federal gambling regulator has expanded its powers to issue fines, block payments and target affiliate networks promoting unlicensed gambling platforms. These enforcement measures reflect a growing concern among European policymakers that stricter regulation may inadvertently push players toward offshore platforms.Taken together, these developments suggest that the next stage of European gambling policy will likely focus on tightening advertising rules, increasing fiscal contributions from the industry and strengthening enforcement against the expanding online black market. <h3>The economic consequences of industry relocation </h3>Beyond gambling taxes, the industry supports a wider economic ecosystem that includes technology development, marketing, payments infrastructure and sports sponsorship. Many gambling companies operate large digital platforms that require highly skilled employees in fields such as software engineering, data science and financial compliance.These jobs are often well paid and concentrated in major European cities such as London, Stockholm, Dublin and Malta. As regulatory and fiscal pressure increases, however, companies may reconsider where they locate these operations.If operators shift investment or relocate business functions to other jurisdictions, the fiscal consequences for governments can be significant. The loss of high-skilled jobs means reduced income tax receipts and lower spending in local economies. Corporate tax contributions may also decline if profits are booked in more favourable jurisdictions.In addition, many gambling companies provide substantial funding for sports through sponsorship agreements. If operators scale back marketing budgets or withdraw from certain markets, sports organisations may lose an important source of revenue.These broader economic effects rarely appear in debates about gambling regulation, which tend to focus primarily on gambling duties and consumer protection. Yet they form an important part of the industry’s overall contribution to national economies. <h3>Opportunities within a changing regulatory environment </h3>Despite these pressures, regulatory reform may also create opportunities for parts of the industry.The increasing complexity of compliance requirements is likely to accelerate consolidation, favouring companies with the scale and technological capability to operate across multiple regulated markets.At the same time, the need to monitor gambling behaviour and conduct financial risk assessments is driving innovation in data analytics and artificial intelligence. Firms specialising in responsible gambling technologies, identity verification and behavioural monitoring may become key partners for operators seeking to meet regulatory obligations.Finally, several European countries are still transitioning toward regulated online gambling markets. For operators able to navigate complex regulatory frameworks, these emerging markets offer opportunities for growth and investment. <h3>Finding the right balance </h3>Europe’s gambling sector is undergoing a structural transformation driven by rising regulation and taxation. The policy objective to reduce harm while ensuring that the industry contributes fairly to public finances is widely shared.The difficulty lies in achieving the right balance. If regulatory and fiscal measures are calibrated carefully, governments can maintain strong consumer protections while preserving a competitive legal market that generates tax revenue and employment.If that balance is lost, however, the consequences may extend beyond the gambling industry itself. Players may migrate to unregulated platforms, high-skilled jobs may relocate, and governments may ultimately collect less tax revenue than expected.For policymakers across Europe, the central challenge in the coming years will therefore be ensuring that efforts to control gambling risks do not unintentionally weaken the regulated markets designed to manage them.

Europe’s Regulatory Gamble: Protection, Taxation and the Risk of a Growing Black Market

Telecommunication tower with mesh dots, glittering particles for wireless telecommunication technology

The UK stands at a decisive moment for its digital infrastructure. After more than a decade of heavy investment and rapid fibre rollout, the question is no longer whether the UK can build next-generation networks, it is whether it can create the right regulatory environment to sustain investment, deliver universal coverage, and unlock the next wave of digital growth.At the centre of this moment is Ofcom’s Telecoms Access Review (TAR) 2026–2031, which will set the rules governing fixed telecoms markets from April 2026 through to March 2031. While technical in nature, its implications are profound: the review will shape how billions of pounds of capital are deployed, how competition evolves, and whether the UK can fully realise the economic benefits of its digital infrastructure.This is not just another regulatory cycle. It is a defining policy decision that will determine whether the UK transitions successfully from a period of rapid network build to one of sustainable growth and innovation.&nbsp; <h3>The UK is approaching the end of the fibre build era and the beginning of a new phase</h3>The review arrives at a critical inflection point. Gigabit-capable broadband now reaches roughly 85–90% of UK premises, and the government is targeting around 99% coverage by the early 2030s. Meanwhile, the industry is approaching the final phase of fibre rollout, preparing for the switch-off of copper networks by January 2027, and responding to surging demand for high-capacity connectivity driven by cloud, AI, and digital services.Tens of billions of pounds of private capital have already been deployed into UK fibre infrastructure. But the next phase extending coverage to harder-to-reach areas, improving network resilience, and enabling new services will require sustained investor confidence.The Telecoms Access Review will determine whether that confidence holds.&nbsp; <h3>A complex regulatory process with far-reaching consequences</h3>Led by Ofcom, the review has followed a multi-year process beginning with evidence gathering in 2024, followed by a major consultation in March 2025 and further targeted consultations through late 2025 and early 2026. Final decisions are expected in March 2026, with the framework coming into force in April 2026.The review covers wholesale markets that underpin the entire connectivity ecosystem, including physical infrastructure access, wholesale broadband markets, leased lines, and core network connectivity. Decisions across these areas will ripple across the sector, influencing everything from fibre rollout economics to enterprise connectivity pricing and mobile network performance. <h3>The central policy challenge: balancing investment and competition</h3>At its core, the Telecoms Access Review is about managing a delicate trade-off. The UK must maintain competitive markets while preserving strong incentives for long-term infrastructure investment.This balance is becoming harder to strike. As the market matures, returns on new fibre build are becoming more uncertain, particularly in rural and less densely populated areas. At the same time, the market has seen rapid entry by alternative network providers, many of which now face financial pressure as capital costs rise and growth slows.The risk is clear: regulation that leans too heavily towards price control or short-term competition could undermine investment just as the UK enters the most challenging phase of deployment.<figure id="figure-tbjq6yx6yimm28d4jo"><img id="tbjq6yx6yimm28d4jo" src="https://cdn.durable.co/getty/d6Yuftagf2aDIVCRJ9QvD4561pSo9J59filuPJvVb21TSaRI3rm7fKL0CMoygKrH.jpeg" alt="Aerial View of a Telecommunications Tower in the British Suburban Landscape" title="Aerial View of a Telecommunications Tower in the British Suburban Landscape" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/getty/d6Yuftagf2aDIVCRJ9QvD4561pSo9J59filuPJvVb21TSaRI3rm7fKL0CMoygKrH.jpeg" data-mce-style="aspect-ratio: 16/9; object-position: center center;"></figure> <h3>Why the review will shape the wider telecoms ecosystem</h3>The Telecoms Access Review is often framed as a fixed broadband regulatory exercise, but its impact extends far beyond that.It will determine the pace of progress towards nationwide gigabit connectivity, influence the success of the copper switch-off, and shape the economics of fibre backhaul required for standalone 5G deployment. In doing so, it will affect everything from smart infrastructure to industrial digitalisation.It will also shape consolidation across the alternative network sector. The UK is likely to see fewer, larger infrastructure players emerge over the next decade, and regulatory certainty will determine whether this consolidation strengthens or weakens competition.Ultimately, the review will influence retail pricing and affordability, shaping digital inclusion outcomes across the country. <h3>The opportunity: creating a world-leading investment environment</h3>If calibrated correctly, the Telecoms Access Review presents a major opportunity for the UK to reinforce its position as one of the most attractive digital infrastructure investment markets globally.Regulatory certainty through 2031 could unlock continued private investment in network expansion, upgrades, and new services. The shift from network build to network monetisation also creates opportunities in enterprise connectivity, edge computing, private networks, and smart infrastructure.The UK has the potential to move beyond infrastructure deployment and position itself as a leader in digital infrastructure services but only if the regulatory framework supports innovation and long-term investment. <h3>Where government must be bold and where it must be cautious</h3>The government and regulator must recognise that the UK is entering a fundamentally different market phase. Policy designed for a period of rapid competition and network entry may not be appropriate for a more mature market focused on sustainability and returns.There are several areas where policy decisions will be critical.First, regulation must avoid undermining investment incentives. The final phase of fibre rollout is inherently more expensive, and overly aggressive price controls risk slowing deployment precisely where connectivity gaps remain.Second, policymakers should accept that some consolidation among alternative network providers is inevitable and, if managed correctly, can strengthen the market. The goal should not be to preserve the maximum number of operators but to ensure sustainable competition and resilient infrastructure.Third, affordability policies must be targeted and proportionate. Protecting vulnerable consumers is essential, but blunt pricing interventions risk distorting market incentives.Fourth, the framework must remain flexible. Telecoms is increasingly converging with cloud, data infrastructure, and digital platforms, and regulation must be able to adapt to technological change.Finally, policy alignment is essential. Decisions within the Telecoms Access Review must complement planning reform, spectrum strategy, cybersecurity policy, and digital inclusion initiatives to ensure a coherent investment environment. <h3>Policy recommendations for the next regulatory period</h3>To maximise the benefits of the review, policymakers should focus on five priorities.The first is to prioritise investment certainty by maintaining a stable and predictable regulatory framework that supports long-term capital allocation.The second is to adopt a pro-investment approach to pricing, allowing sufficient pricing flexibility for fibre networks while ensuring targeted protections for vulnerable consumers.Third, government should actively support market consolidation where it strengthens long-term competition and network resilience.Fourth, policymakers should accelerate measures that reduce deployment costs, including planning reform and streamlined infrastructure access processes.Finally, the review should be used as a platform to support innovation by encouraging new wholesale models and enabling investment in next-generation digital infrastructure services.<h3>A once-in-a-decade opportunity to set the direction of the market</h3>The Telecoms Access Review is more than a regulatory exercise it is a strategic decision about the future of the UK’s digital economy.If the framework strikes the right balance, the UK can move confidently into the next phase of its digital infrastructure journey, characterised by universal connectivity, strong competition, and continued private investment.If it gets the balance wrong, the risk is slower deployment, reduced investment, and missed opportunities to capitalise on the economic potential of next-generation networks.The decisions taken in this review will shape the UK telecoms landscape through to 2031 and beyond. Policymakers should treat it accordingly, not simply as a technical consultation, but as a cornerstone of the country’s long-term growth strategy.

The Telecoms Access Review is the UK’s defining digital infrastructure decision and government must get the balance right

For decades, defence spending sat largely outside Britain’s economic debate a necessary function of the state, but rarely a defining fiscal question. That era is ending.The emerging discussion is no longer just about moving core defence spending toward 3% of GDP. Increasingly, policymakers and strategists are considering whether the UK should move toward spending closer to 5% of GDP on defence and wider national security, reflecting a broader definition of security that includes resilience, infrastructure protection, cyber capability, and economic preparedness.At roughly £66 billion today around 2.3–2.4% of GDP the UK already spends above NATO’s baseline, with plans to rise to 2.5% by 2027. But a broader 5% framework would represent one of the largest structural reallocations of public resources in decades, potentially requiring tens of billions in additional annual spending once wider security investments are included.The strategic logic is increasingly clear. In a world of rising geopolitical risk, economic resilience and national security are becoming inseparable. But while the direction of travel is justified, the scale of the shift means difficult choices will shape government priorities, industrial strategy, and the wider economy for years to come.This is not simply a defence policy, it is a defining economic decision about what Britain chooses to prioritise._________________________________________________________________________________<h3>The industrial upside: reinforcing Britain’s strategic strengths</h3>Higher defence spending has the potential to reinforce some of the UK’s most competitive industries, particularly where long-term procurement supports innovation and high-skill employment.The Ministry of Defence already manages spending approaching £80 billion annually, with significant capital investment flowing into major programmes such as the Dreadnought nuclear submarine programme, expected to cost over £30 billion, and the Global Combat Air Programme (GCAP) the next-generation fighter jet initiative with Japan and Italy.The government’s long-term shipbuilding pipeline, alongside continued investment in naval capabilities, ensures sustained demand across maritime supply chains.These programmes provide decades-long investment certainty, supporting advanced manufacturing, engineering, and research-intensive industries that typically deliver strong productivity gains.Defence procurement is also increasingly innovation-led, with commitments to direct around 10% of the equipment budget toward emerging technologies, including AI, cyber, and autonomous systems.If aligned with industrial strategy, this spending can strengthen export capability and reinforce the UK’s position in high-value manufacturing sectors.<figure id="figure-k8i0pob6eomls2awq7"><img id="k8i0pob6eomls2awq7" src="https://cdn.durable.co/getty/32LnLCvPa1vD1TqrFyFcwwJqkXIM7lLVckwkhqIbjGkmY542gg3d8blLcwITHk7Y.jpeg" alt="Energy and Power icons set with flag" title="Energy and Power icons set with flag" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/getty/32LnLCvPa1vD1TqrFyFcwwJqkXIM7lLVckwkhqIbjGkmY542gg3d8blLcwITHk7Y.jpeg" data-mce-style="aspect-ratio: 16/9; object-position: center center;"></figure>_________________________________________________________________________________<h3>Regional growth: defence as place-based policy </h3>Defence investment has historically been one of the most powerful drivers of regional industrial activity.Shipbuilding in Scotland, aerospace in the South West, and advanced manufacturing across northern England anchor skilled jobs and supply chains that support local economies.A sustained increase in spending, particularly when broader resilience and infrastructure security investments are included could deepen these industrial clusters, supporting regional productivity and reinforcing efforts to rebalance the economy geographically.In effect, defence spending becomes a form of place-based economic policy creating long-term employment and investment outside London._________________________________________________________________________________&nbsp; <h3>Technology spillovers: innovation beyond defence </h3>Modern defence spending increasingly overlaps with frontier technologies.Investment in cyber capabilities, space systems, advanced materials, and digital infrastructure has the potential to generate spillovers across the wider economy, much as defence R&amp;D historically contributed to major technological breakthroughs.Across Europe, defence innovation spending is rising sharply, reflecting a broader shift toward technological competition between advanced economies.For the UK, this presents an opportunity to strengthen its technology ecosystem while supporting long-term productivity growth.&nbsp;_________________________________________________________________________________ <h3>Learning from Europe: a shared strategic shift </h3>The UK’s move toward higher defence spending mirrors a broader trend across advanced economies.Germany’s €100 billion special defence fund demonstrates how governments are treating defence as a strategic investment in industrial capability and resilience.Poland has gone further still, raising defence spending toward 4–5% of GDP, using increased budgets to expand domestic production and strengthen national resilience in response to geopolitical risk.The lesson from these countries is clear: higher defence spending can support growth and industrial capacity, but only when supported by disciplined fiscal planning and clear strategic priorities._________________________________________________________________________________<h3>The unavoidable trade-offs </h3>Even with strong economic and strategic justification, higher defence spending will inevitably reshape priorities across government.Recent spending plans already illustrate this dynamic. Overseas aid budgets have been reduced, while departments such as justice, local government, and environment face tighter settlements and slower spending growth.Transport and long-term infrastructure projects are particularly exposed to shifting priorities, with some major programmes facing delays or reduced funding as fiscal pressures intensify.These adjustments reflect a fundamental reality: expanding the security envelope does not simply increase public spending , it changes the balance of government priorities.<figure id="figure-rp0jkfoqfmls2c3te"><img id="rp0jkfoqfmls2c3te" src="https://cdn.durable.co/getty/20XIW51f58oZPKsbCcM6hWAv2MXgOECqAbvcO5TFL5P6OJddwuXT2e0rALIa8QqH.jpeg" alt="UK and EU" title="UK and EU" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/getty/20XIW51f58oZPKsbCcM6hWAv2MXgOECqAbvcO5TFL5P6OJddwuXT2e0rALIa8QqH.jpeg" data-mce-style="aspect-ratio: 16/9; object-position: center center;"></figure>_________________________________________________________________________________&nbsp; <h3>Fiscal credibility and the macroeconomic balance </h3>The broader economic impact will depend heavily on how increased spending is financed.With UK growth running at roughly 1% and public debt elevated, maintaining fiscal credibility will be essential to avoiding higher borrowing costs.Markets will closely watch whether higher spending is accompanied by credible fiscal planning, particularly as sustained increases reduce flexibility to respond to future economic shocks.For consumer-facing sectors, the impact may be indirect but meaningful if tighter fiscal policy slows disposable income growth.&nbsp;_________________________________________________________________________________<h3>A structural shift toward a security-led state </h3>The move toward a 5% framework reflects a deeper change in economic thinking.For much of the post-Cold War period, governments prioritised efficiency and social spending in a relatively stable geopolitical environment. Today, resilience, strategic autonomy, and economic security are becoming central policy objectives.Across NATO, defence budgets are rising rapidly, signalling a structural shift toward a more security-focused model of government spending.For the UK, this represents a recalibration of the state, one where defence and resilience play a larger role in shaping economic priorities._________________________________________________________________________________&nbsp; <h3>The critical question: investment or consumption? </h3>Ultimately, the long-term economic impact will depend on whether higher defence spending drives productivity and innovation.If spending supports high-skill employment, exports, technological development, and infrastructure resilience, it could strengthen the UK’s growth trajectory.If it primarily displaces other productive investment, it risks becoming largely consumptive spending that increases fiscal pressure without boosting economic potential.Execution will determine which path dominates._________________________________________________________________________________&nbsp; Winners and losers at a glance Likely winners:<ul><li>Defence and aerospace industries</li><li>Advanced manufacturing and engineering</li><li>Cyber, AI, and dual-use technology firms</li><li>Regional industrial economies</li><li>Energy and infrastructure resilience sectors </li></ul>Likely under pressure:<ul><li>Overseas aid and international development</li><li>Justice, local government, and environment budgets</li><li>Long-term infrastructure and transport investment</li><li>Consumer-facing sectors if fiscal policy tightens</li><li>Overall fiscal flexibility</li></ul>___________________________________________________________________________________________<h3>Conclusion: a necessary shift that demands discipline</h3>Moving toward spending closer to 5% of GDP on defence and national security reflects a changing world in which economic resilience and security are increasingly intertwined.Done well, it could reinforce Britain’s industrial base, support innovation, strengthen infrastructure resilience, and drive regional growth. Done poorly, it risks crowding out investment and narrowing fiscal flexibility.The experience of countries like Germany and Poland shows that higher security spending can support economic resilience but only when matched with clear strategy and fiscal discipline.For the UK, the opportunity is significant. But so is the responsibility to ensure that this shift strengthens not only national security, but the long-term foundations of economic growth.Because once spending priorities move at this scale, they shape the economy for decades.<figure id="figure-rf3hyys5a8mls2dvgd"><img id="rf3hyys5a8mls2dvgd" src="https://cdn.durable.co/getty/2eqH7aZqR95iSTC9fswWf8RWgHOEcp2NhfGjVLE8FtHMZbGKcHP6g1LUYvu4dBDT.jpeg" alt="United Kingdom economy and financial market growth concept, 3D rendering" title="United Kingdom economy and financial market growth concept, 3D rendering" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionX="undefined" data-positionY="undefined" data-fullWidth="false"/></figure>

Defence at 5%: Britain’s Strategic Investment and the Economic Choices It Demands

December 2025 marked a quiet but decisive moment for the UK’s transport transition. Battery electric vehicles accounted for one-third of all new car registrations, effectively meeting the 2026 Zero Emission Vehicle mandate a year early. Plug-in vehicles now consistently outperform internal combustion alternatives, and annual BEV volumes continue to grow at scale. The conclusion is unavoidable: demand is no longer the constraint. Electrification has moved beyond ambition and into execution. Yet history shows that transitions are not won at the point of adoption. They are won in how value is captured, industries are shaped, and strategic dependencies are managed. On that front, the hardest work is only just beginning. From our vantage point at Larkspur International, advising senior leaders across energy, mobility, and industrial strategy, a clear pattern is emerging. The UK’s success in driving EV uptake now exposes a deeper challenge: the country risks becoming an end market rather than a value creator unless the next phase is approached with equal clarity and resolve. Batteries sit at the centre of this challenge. While global battery capacity continues to expand rapidly, profitability remains under pressure and supply chains remain highly concentrated. Critical minerals, precursor materials, and advanced manufacturing capabilities are still dominated by a small number of geographies. Without a deliberate strategy to anchor battery value chains domestically and across Europe, electrification will increasingly rely on imported capability with long-term implications for competitiveness, resilience, and energy security. ZEV compliance alone will not solve this. Meeting regulatory targets is necessary, but it is not sufficient. The question facing industry and government alike is not whether EVs will dominate the fleet that outcome is now inevitable but who will control the technologies, infrastructure, and industrial know-how that underpin the system. This challenge is particularly visible in the commercial vehicle segment. While passenger EV adoption has accelerated, electric vans and fleets continue to lag expectations. The barrier is not consumer sentiment or product availability; it is operational certainty. Fleet operators require confidence in charging availability, residual values, financing structures, and total cost of ownership. Solving these demands integrated thinking across infrastructure, energy systems, capital markets, and operations not isolated policy interventions. At the same time, electrification is reshaping the power system itself. Transport demand is becoming an energy-system issue, and grid constraints, flexibility, storage, and smart charging will increasingly define the pace and economics of adoption. Treating energy and transport as separate domains is no longer viable. Competitive advantage will accrue to those who plan and invest across both. The UK has achieved something important. It has demonstrated that policy certainty, market mechanisms, and consumer readiness can align at scale. But this success now raises the stakes. The next phase of the transition will be harder, more capital-intensive, and more strategic. It will require difficult choices about industrial priorities, investment allocation, and long-term risk. Those choices will determine whether the UK simply consumes the technologies of electrification or helps shape and export them. This is the moment for leadership. At Larkspur International, we work with organisations that recognise this inflection point and are prepared to act decisively aligning strategy, capital, policy, and execution to build durable advantage in the electrified economy. For leaders grappling with battery industrialisation, energy-transport integration, commercial fleet transition, or long-term infrastructure strategy, now is the time to engage. The EV era has arrived. The real question is who will lead what comes next. If you are ready to move from compliance to competitiveness, we invite you to start that conversation with us.

The UK EV Transition Has Reached a Tipping Point and What Comes Next Will Define Who Leads

HM Revenue and Customs Government department in London

There is a comfortable myth in public-sector technology: that enough funding, applied at sufficient scale, will eventually modernise anything. HMRC’s current investment trajectory puts that belief to the test.With multi-billion-pound commitments across applications, infrastructure, and services over the next two years, HM Revenue &amp; Customs is positioning itself as one of the most significant technology buyers in Europe. The opportunity for the market is real and sizeable. But so is the risk that this becomes another expensive attempt to correct structural problems that money alone cannot resolve.What matters now is not how much HMRC plans to spend, but how intelligently it deploys procurement power and how honestly the supply market responds.<h3> </h3><h3>A Buyer With Scale and With Scar Tissue </h3>HMRC’s scale is often quoted, but rarely examined. Collecting more than £900bn annually and operating national tax, customs, and border systems means its technology estate is not merely large&nbsp; it is politically exposed, operationally brittle, and historically constrained.Decades of incremental outsourcing, platform layering, and contract-driven architecture have produced an estate that is expensive to run and hard to change. The current push toward cloud platforms, SaaS, data services, and AI is not optional modernisation; it is an attempt to restore manoeuvrability.Recent supplier engagement activity simply confirms what was already evident: HMRC is using procurement as a corrective instrument, not a neutral buying function.That distinction matters because corrective procurement is unforgiving.<h3> </h3><h3>The Opportunity Is Huge and Concentrated</h3>From a market perspective, HMRC’s forward pipeline is unusually clear.On the applications side, an estimated £2.3bn pipeline over the next 18–24 months is expected to flow into enterprise tax platforms, case and document management, integration and API layers, legacy modernisation, and AI-enabled data services. These are not peripheral tools; they sit at the operational heart of how tax is assessed, collected, and disputed.On infrastructure, the scale is even larger- approximately £3bn over two years, driven by data-centre exit, cloud migration, cyber security (including SIEM and assurance services), network modernisation, modern workplace services for over 60,000 staff, and a shift from traditional data warehousing to lakehouse architectures.Add to this professional services demand particularly for Borders and Trade delivery, large-scale transformation programmes, and delivery assurance and the picture becomes clear: HMRC is not buying experiments. It is re-platforming itself.For suppliers, this is a once-in-a-cycle opportunity. For HMRC, it is a moment where failure would be both expensive and visible.<h3> </h3><h3>Procurement Reform: Necessary, But Not a Silver Bullet </h3>HMRC’s growing use of flexible procurement approaches enabled by the Procurement Act is directionally right. Multi-stage competitions, dialogue, and funded innovation reduce the risk of locking into the wrong solution too early.But flexibility cuts both ways.The danger is not under-specification; it is over-optimism. Complex legacy transformation especially at HMRC’s scale has a habit of absorbing supplier enthusiasm and returning delivery reality. Flexible procurement must still converge on hard architectural decisions, enforceable commercial accountability, and credible exit strategies.Innovation-led routes, show promise. But pilots that scale cleanly remain the exception. The real test will be whether HMRC resists turning successful prototypes into bespoke solutions that recreate dependency under a different name.<h3>&nbsp; </h3><h3>SMEs: Opportunity or Instrument? </h3>Mandated SME participation targets and innovation pathways are often framed as progressive reform. In practice, they are also a hedge against concentration risk.HMRC’s insistence on 20–30% SME involvement on major contracts reflects a belief that monolithic supply chains are brittle. A more modular ecosystem spreads risk but increases coordination complexity.For SMEs, the opportunity is genuine but conditional. Financial resilience, security accreditation, tax compliance, accessibility, and delivery maturity are no longer optional thresholds. The romantic idea of the nimble disruptor does not survive contact with HMRC’s governance environment.For prime contractors, the challenge is sharper still: superficial SME inclusion will not withstand scrutiny. Partnership models will be judged on delivery substance, not bid narratives.<h3>&nbsp; </h3><h3>The Quiet Hardening of Non-Negotiables </h3>If there is one area where HMRC’s posture has hardened, it is around what cannot be traded off.UK data sovereignty, security assurance, accessibility compliance, and AI governance are now treated as entry conditions, not evaluation criteria. Suppliers who frame these as constraints on innovation are misreading the moment.This reflects institutional memory shaped by past failures across government, where innovation outran governance. HMRC appears determined not to repeat that mistake, even if it slows procurement or narrows supplier choice.That restraint deserves credit. It also raises the risk that the market focuses more on compliance theatre than on delivery capability.<h3>&nbsp; </h3><h3>What This Actually Means for Citizens </h3>For all the discussion of platforms, pipelines, and procurement reform, none of this matters unless it changes outcomes for citizens. People do not experience cloud migration; they experience tax codes, repayments, penalties, and disputes often at moments of financial stress.If HMRC’s £2.3bn investment in applications and data platforms is implemented well, citizens should see faster and more accurate decisions. Better integration between systems means fewer errors caused by mismatched data, fewer requests for the same information, and fewer cases stuck between departments. Automation, used properly, should reduce processing times for refunds, benefits adjustments, and compliance checks.For small businesses, the impact could be transformative. Modern case management and real-time data services should mean clearer visibility of liabilities, quicker resolution of queries, and fewer costly delays that quietly drain cashflow. In that sense, large-scale technology spend becomes an economic policy lever reducing friction in the system rather than simply enforcing it.The £3bn infrastructure investment matters here too. Resilient cloud platforms and modern networks are not abstract upgrades- they are what prevent system outages during filing deadlines, reduce service downtime, and allow HMRC staff to respond flexibly during crises. Citizens only notice infrastructure when it fails and that failure is disproportionately felt by those least able to absorb it.But the risks are equally real.Large transformations externalise their failures. Backlogs become the citizen’s problem. Poorly governed automation becomes unchallengeable decision-making. AI systems that cannot explain outcomes undermine trust particularly when decisions affect income, benefits, or penalties.Accessibility is another fault line. Digital-by-default services promise efficiency only if systems are genuinely inclusive. If modern platforms assume digital confidence, constant connectivity, or complex self-service journeys, then investment risks widening inequality rather than reducing it.Ultimately, citizens do not care whether HMRC buys “best-in-class” technology. They care whether it uses technology to be fairer, clearer, and more humane. Procurement decisions that privilege speed over accountability, or innovation over comprehension, will be felt far beyond government in household finances, business survival, and confidence in the tax system itself.This is the standard against which all this spending should be judged.<h3>&nbsp; </h3><h3>Social Value: Signal or Substance? </h3>Social value is now a material differentiator in HMRC competitions. In tightly scored procurements, it will influence outcomes.The risk is familiar: commitments that look strong on paper but sit orthogonally to delivery reality. HMRC’s preference for contract-specific, measurable outcomes is sensible but enforcing that discipline over multi-year programmes is harder than scoring it at bid stage.Suppliers should assume scrutiny will increase. HMRC should assume the same.<h3>&nbsp; </h3><h3>The Final Test: Can HMRC Buy Its Way Out of the Past? </h3>HMRC is about to discover something few public institutions ever test at this scale: whether a buyer with enough money, enough policy cover, and improving procurement tools can actually change the behaviour of its supply market rather than be reshaped by it.The danger is not that HMRC spends too little or moves too slowly. The danger is that it spends decisively, procures “correctly”, and still reproduces the same outcomes dependency, opacity, and fragile delivery under newer labels and cleaner architectures.Many of the suppliers best placed to win the next generation of contracts are also those that benefited most from the last. If transformation once again depends on proprietary platforms, asymmetric knowledge, and exit strategies that exist only on paper, then nothing fundamental has changed.The real question is not whether HMRC can modernise its systems. It almost certainly can.The question is whether it can change the power balance that has historically governed how government technology is delivered and whether the market is willing to meet a buyer that is trying to purchase independence rather than convenience.If this round of investment does not achieve that, then the problem was never funding, frameworks, or procurement law.

HMRC Is About to Spend Billions on Technology But Money Alone Won’t Fix the Problem

Larkspur International

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Larkspur International operates at the intersection of business and government where decisions are shaped, risks emerge, and opportunities are realised.

Larkspur International is a business consultancy with a growth mindset working alongside clients to navigate government systems, eliminate barriers, and deliver measurable commercial outcomes.

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