AI In The Public Sector: How the Transformation Fund Helps Public Sector Buyers Deliver Smarter Artificial Intelligence Services.

The UK Government’s 2025 Spring Statement has put reform through technology firmly on the agenda. The challenge for public sector buyers is turning this ambition into reality.  The move to a digitally enhanced future is backed by £3.25 billion in funding through the new Transformation Fund, as well as a further £42 million specifically allocated for public sector AI-led pilots. Yet, the path to adoption is anything but clear. Who can you trust? Where do you start? Bloom’s NEPRO³ compliant marketplace makes it safer, faster, and easier to procure credible AI solutions that work in practice, not just on paper.

Recently, Bloom attended the Politico AI and Tech Summit in London. Delegates at the prestigious event made it clear that funding alone was not enough. As voices from government, academia, and industry debated the role of AI in public sector growth, there was cautious optimism, tempered by concern. As UK Solicitor General, Lucy Rigby outlined in her keynote remarks, the government’s focus is not simply on innovation for its own sake, but on practical, constituent-focused applications of AI, particularly in areas such as her main area of interest, the Crown Prosecution Service (CPS).  

The step-change in performance requires trusted delivery partners, compliant routes to market, and a procurement system that supports innovation instead of slowing it down. This, as you might have guessed, is where Bloom comes in.

How To Make The Most Of AI To Deliver Smarter Public Services.

Public sector reform has long been a priority, but what makes 2025 different is that funding, political will, and transformative technology have all aligned. With this convergence, the case for AI has moved beyond the theoretical. Now, talk is definitely about real-world applications. Cutting down on administrative paperwork, freeing up time, and creating truly responsive frontline services are all firmly in our sights. 

However, when asked if AI was a silver bullet, the summit panel revealed mixed views. Representatives of the tech industry argued that overregulation could stifle investment and put the brakes on. Voices from government and academia emphasised the need for caution. If not brakes, then guardrails are required to make sure AI adoption is inclusive, ethical, and practical for end-users.

This debate reinforces an important point for public buyers: AI and automation are tools to enhance, not replace, the human element in public services. Making those tools work starts with sourcing the right specialist suppliers to help the sector adopt AI appropriately.

Spending the £3.25bn Transformation Fund Wisely.

The Transformation Fund is more than a budget line; it’s a policy lever for change intended to unlock new capabilities across government, from digitising services to introducing smarter, more cost-effective workflows in high-pressure areas like health and social care.

The potential is significant, but turning policy into practice means overcoming the practical constraints of procurement. Often, the best ideas come from innovative small and medium-sized enterprises (SMEs), yet they face significant barriers to entry, especially in tightly regulated public sector environments. Sometimes, possibly unfairly, considered a risky option, SMEs often lose out to large incumbents who have scale and momentum on their side. 

However, as Lucy Rigby noted in relation to AI in the Crown Prosecution Service, the government’s approach is increasingly one of pragmatic innovation; trialling new methodologies, seeing what works, learning from them, and then scaling them up. That’s a model that demands procurement pathways that are agile, compliant, and built for speed. Are existing big-brand digital outsourcers the best suppliers for this new way of working? At Bloom, we suspect not. 

If there’s a tension at work as we head towards the future, it surrounds capacity. Do we have the processing and data handling capacity to compete with global AI leaders, such as those in the US and China? Some suggest the lack of infrastructure means we will always remain an AI taker rather than a maker.  However, the more optimistic view holds that the UK has specialist skills to lead in niches such as the biotech and public health sectors, provided the right delivery ecosystem is in place. For delivery, read procurement. To succeed, public buyers will require fast access to specialist AI providers, data engineers, and agile delivery teams. Many of these suppliers won’t be household names. They might not even exist yet. When they arrive, they are unlikely to be big, known quantities. They will be smaller businesses that combine expertise with agility. Fortunately, such companies are the kind that Bloom already helps engage profitably with the public sector.

Connecting Buyers with the Right AI Suppliers

Despite the growing appetite for innovation, traditional procurement processes are still viewed as too rigid to keep pace with life in the new digital world. This was echoed at the Summit, where regulatory uncertainty and bureaucratic drag were identified as factors that could stall the adoption of AI.

For today’s public sector buyers, the barrier isn’t a lack of ambition. It is a lack of the resources required to handle the complexities of 21st-century procurement. How do you, on a budget, find a trusted supplier who can get to grips with the ever-changing digital landscape, onboard them quickly, and set them to work while ensuring regulatory compliance at every step? Nobody wants to hire the wrong supplier by acting too quickly, but equally, every right-thinking public sector procurement professional knows the risks of delay. 

From the other side of the fence, SMEs, ideally placed to bring AI expertise to the party, struggle to get access to public sector markets. Government represents a major opportunity, of course, but getting through the door often requires navigating frameworks, certifications, and long bidding cycles that have developed, rightly or wrongly, to minimise change, maintain long relationships, and keep markets stable. 

The alternative is to support small, specialist disrupters proactively. To help understand their issues, we spoke with Orbital AI, a multi-award-winning business that builds custom AI solutions for the public sector.

An AI Technology Specialist’s View

At the forefront of AI innovation, Orbital understands that one-size-fits-all solutions are simply inadequate in complex government and public sector contexts. Each department faces its own distinct challenges, shaped by unique workflows, compliance demands, and citizen-facing priorities, which means a truly bespoke approach is often necessary. Building the right AI system is an iterative, collaborative process that requires flexibility, a deep understanding of the client’s environment, and a willingness to design from the ground up rather than forcing pre-built products into ill-fitting situations. What’s more, when a department takes ownership of the intellectual property created, it unlocks a powerful opportunity: the ability to commercialise that IP by licensing it to other departments or organisations, generating ongoing revenue and creating lasting value beyond the initial implementation. Successful AI isn’t just about technology — it’s about partnership, customisation, and building sustainable assets for the future. 

Scoop, one of Orbital’s flagship AI products, is disrupting the training and development space. It combines realistic Generative AI video with proprietary avatar technology to deliver highly visual, simulation-based experiences that immerse learners in authentic scenarios, presenting them with meaningful decisions along the way. By cutting training costs by over 50% and boosting engagement and knowledge retention through gamified design, Scoop is setting a new standard for impactful, cost-effective learning.

Transparency in AI development and implementation is crucial. Orbital recommends seeking partners who can clearly explain their AI decision-making processes and provide ongoing visibility. Government AI projects tend to evolve significantly from initial brief through deployment and piloting to continual improvement. Vendors need to adapt, iterate, and redirect solutions as requirements shift, often quickly.  The best AI service providers act as strategic partners, providing proactive insights and actions as solutions emerge, while maintaining a focus on measurable improvements to public service delivery and citizen outcomes.  To succeed, contractual terms, project leadership, measurement, and monitoring all need to align with this way of working.  For Orbital, this starts with procurement. Their challenge is meeting buyers who think in the same way. 

How Bloom Supports Faster, More Innovative AI Procurement

Bloom was formed to resolve the disconnect between specialists and public procurement professionals.  We offer a model that doesn’t just allow for innovation, it centres on it entirely. Through our NEPRO3 framework, Bloom helps public sector buyers find and engage pre-approved suppliers from a pool of innovative, agile SMEs quickly and safely. Our network comprises hundreds of experts, many of whom possess deep knowledge of AI, automation, digital transformation, and data analytics; precisely the skills required to leverage the Transformation Fund’s billions.  

What sets Bloom apart isn’t just facilitating access and introductions, it’s ongoing procurement and project support. We help buyers focus on outcomes, not management. We help suppliers focus on delivery, not ticking boxes. The future of AI in government will depend on who gets to deliver it. Big names and tech giants may dominate the headlines, but it’s smaller, more agile firms, backed by platforms like Bloom, who will remain best placed to deliver the required fast-moving skills.

Helping Public Sector Teams Act with Confidence

The momentum is building. From the Spring Statement to Politico’s AI and Tech Summit, the signals are aligned: now is the time for bold action in public sector innovation. But delivering on that promise depends on execution. This is where Bloom can help. Bloom gives buyers the tools, frameworks, and supplier access they need to move quickly and deliver confidently. It connects government procurement teams with trusted, vetted AI suppliers that align with public sector values, rules and requirements. Starting small but scaling rapidly, Bloom builds relationships that enable innovation with real impact.  Our tools make procurement work for the future, not just the present. The funding is there. The suppliers are ready. The policy direction is clear. With Bloom’s platform, public sector procurement teams can act with confidence, speed, and results.