Is the UK public sector too dependent on US technology?

New research by the Institute for Public Policy Research (IPPR) has revealed the UK public sector’s significant dependence on foreign technology suppliers

The IPPR findings raise concerns about the UK’s digital sovereignty and the risks of relying heavily on a small number of overseas technology providers.

The analysis, published on 11 November 2026, found that around four-fifths of public sector technology spending goes to just 150 major suppliers. This leaves critical public infrastructure potentially exposed to decisions made by foreign governments and international technology companies.

US technology dominates government spending

Previous IPPR research studying £19.2 billion of spending with the UK’s 150 largest technology suppliers found that 42% went to companies headquartered in Britain.

However, a closer examination revealed that only 15% went to businesses considered fully British. To qualify, companies must have UK headquarters and ownership, a predominantly local workforce, and must not simply resell technology produced by foreign companies.

Resellers of overseas technology accounted for 43% of the spending allocated to UK-headquartered firms.

The research also found that almost twice as much UK public sector technology spending goes to US companies as to suppliers from all other foreign countries combined.

Concerns over digital sovereignty

The findings come as concerns increase about digital sovereignty, particularly following geopolitical developments and restrictions imposed by the US government on access to Anthropic’s latest AI models outside the United States.

In response, the UK government launched a £500 million Sovereign AI Fund in April 2026. A further £140 million investment to strengthen domestic capabilities through the Sovereign AI Unit was also announced in the previous month’s Budget.

However, IPPR researchers argue that developing Britain’s own technology industry, while important, will not be enough to protect the country from international supply chain risks.

They warn that the UK has limited bargaining power when negotiating access to the world’s most advanced AI technologies.

The report, titled Locked in: A realist’s agenda for digital sovereignty, recommends three key actions for the government:

• Strengthen public procurement:Government should purchase technology collectively and include contractual rights that allow public bodies to switch suppliers.
• Shape the technology market: Use procurement, investment and competition policies to prevent a small number of companies from gaining excessive control over critical technologies.
• Build international alliances: Work with other influential middle powers, including France, Germany, Japan and South Korea, to strengthen collective negotiating power and secure access to advanced AI technologies.

Former Chancellor of the Duchy of Lancaster Darren Jones also emphasised the importance of working with international partners, arguing that the UK cannot secure control over its technological future by acting alone.

Securing the UK’s technological future

The research shows how the UK needs to develop domestic technology capabilities while reducing dependence on foreign suppliers.

IPPR argues that the government must take a more strategic approach to technology procurement, support industries where Britain has genuine competitive advantages and work with international partners to influence the development and governance of advanced technologies.