Labour landslide win prompts urgent digital transformation push

The Labour Party has secured a historic landslide victory in the United Kingdom's general election, claiming the largest majority since 1832, though with a notably low vote share. With Labour taking 412 out of 650 seats, this result heralds a significant shift in the political landscape and poses substantial implications for the UK tech industry.

Amanda Brock, CEO of OpenUK, emphasised that Labour must prioritise digital transformation from the outset. She noted the urgency of a fundamental shift in digital policies to impact every individual across the UK. Brock highlighted that creating highly paid tech jobs in both rural and urban areas would be instrumental in achieving the GDP growth Labour seeks. This would be supported by fostering skills in open source software, allowing rurally based individuals to take on international jobs, thus injecting global salaries into the UK economy and stemming the talent flight. She remarked, "Change is never easy, but it’s our new Prime Minister’s first commitment to the UK citizens who gifted Labour their landslide election victory. Change must not only start now but must be digital."

Brock also addressed the importance of breaking free from vendor lock-in within the NHS. By developing skills to manage open source software, the NHS could achieve interoperability, unlocking efficiency and alleviating frustration for both patients and practitioners. She stressed that the new government owes this change to the NHS, to enable it to mature and manage its infrastructure independently.

The influence of AI is another critical area. Brock warned against allowing AI to be controlled by a few, advocating for open AI to ensure lessons are learned from the past two decades of technology development. "To protect the UK’s AI leadership, Labour must look to open AI wherever possible, but it must do this with a considered understanding of what that means," she said. The complexity of this task requires leaders who can navigate the intricate demands of the technology.

Rupal Karia, Country Leader UK&I at Celonis, pointed out the necessity of addressing inefficiencies within UK businesses. He suggested that Labour should focus on leveraging process intelligence to make businesses more agile. "Delivering fast growth is tough, but in the meantime businesses can become leaner and more agile, gaining maximum value within their current processes," Karia observed.

Similarly, James Hall, Vice President and Country Manager UK&I at Snowflake, emphasised the importance of tech investment, particularly in AI, to enhance public services and citizens' lives. He anticipated seeing AI embedded across government departments and advocated for an AI fund to promote public-private innovation. Hall also stressed the need for robust AI regulation tailored to industry-specific requirements, highlighting the crucial impact AI can have on sectors like healthcare and pharmaceuticals.

Dale Peters, Senior Research Director at TechMarketView, provided further insights on Labour’s manifesto and its implications for the tech sector. Labour aims to support digital technology deployment, stimulate innovation, and facilitate data-driven public services through initiatives like a National Data Library. Peters expects strong emphasis on digital technology in healthcare, potentially accelerating diagnosis and shifting care focus upstream. Additionally, Labour plans for a National Care Service will likely require significant investment in digital and IoT technology to achieve 'home first' care.

Labour also intends to modernise Whitehall and the wider public sector, enhancing digital skills and standardising procurement approaches. Shadow Secretary of State for Science, Innovation and Technology, Peter Kyle, has highlighted the need for the Department for Science, Innovation and Technology (DSIT) to become the digital hub for government, responsible for delivering common platforms and facilitating data exchange. Modernisation of HMRC to tackle tax avoidance and fraud is also anticipated as part of Labour’s broader reforms.

Despite Labour's substantial majority, the low voter turnout and vote share mean that the new government must act swiftly and decisively. The current spending review period ends in March 2025, giving Labour limited time to formalise plans and set departmental budgets. Technology will undoubtedly play a pivotal role in these reforms, presenting opportunities for software and IT services suppliers, though the pace of transformation may be tempered by concerns around caution, concern, and complexity, as noted in the latest UK SITS Market Trends & Forecasts 2024 report.