Britain will become “the fastest adopter of AI in the G7” the Chancellor, Rachel Reeves, proudly told us last month. If that is to be the case, she might want to have a word with her own department.
At the same time as Reeves was boasting to world leaders, HM Treasury was recruiting for a Chief Technology Officer (CTO). According to the job specification, the successful candidate would shape how technology enables “one of the UK’s most influential departments to operate, decide and deliver”. They will “define technology strategy, oversee architecture, manage technical risk, work with suppliers, assure cyber resilience, and ensure systems are modern, secure, value for money and aligned with wider government strategy”.
The Government’s own State of Digital Government Review makes for painful reading
The salary offered: £69,820 to £74,000 if in Norwich or Darlington (and an extra £3,000 if based in London).
This is the department responsible for setting tax and spend, the Government’s illusive growth mission, financial services, public investment and the machinery of economic policy. This is not about one Chancellor, one department, or one unfortunate job advert. It feels inevitable that the same approach will be continued under a Burnham premiership.
For decades, we have treated engineering as something that happens after the important decisions have been made. The thinking is outsourced to management consultants, while the doing is outsourced to large technology firms. The state is a passive customer of systems designed elsewhere, owned elsewhere and optimised around someone else’s incentives. Once it’s all done, engineers, such as this unfortunate CTO, are brought in to try and get the Ferrari they’ve been sold work for mowing the lawn.
That model is no longer fit for purpose and reveals a structural misjudgement about what engineering is for.
In the private sector, engineering talent is not treated as administrative overhead. It is a vital asset. When companies find a good CTO, they hold on to them for dear life and reward them with salary, equity and responsibility. Senior technology roles sit well into six figures. For top engineering talent at Big Tech companies, pay packages are into the tens of millions.
At £77,000, the HM Treasury is not competing with AI companies like Google DeepMind, or Anthropic, nor fintech companies like Revolut or Wise. Rather, it is in competition with a particularly successful branch manager of Currys.
The Government’s own State of Digital Government Review makes for painful reading. The public sector spends £26 billion a year on digital and data. Most of which goes on contractors, managed service providers and management consultants.
By capping the salary at £77,000, HM Treasury pays its CTO £400 a day. But when the same department brings in management consultants to patch the holes, the rates explode. For a mid-level consultant at a firm like BCG or Bain, HM Government pays as much as £5,500 per day, and almost twice that for a partner. Ministers say they cannot afford to pay technical people properly but Whitehall can afford to pay for them at far higher rates once they arrive through a slide deck on ‘digital transformation’ with a McKinsey logo.
Rosie Collington and Mariana Mazzucato’s book, The Big Con, explains that decades of outsourcing to expensive management consulting firms has infantilised our government and left them ill-equipped to handle modern crises. Some of the biggest challenges facing government are now engineering problems as much as policy problems – whether the generation of affordable power, the building of reliable public transport, or the safe introduction of AI. And, if government does not put engineers at the heart of decision-making, it cannot properly understand the systems it is trying to govern. It cannot buy technology well. It cannot challenge suppliers.
One result of this infantilisation of Government has created what the think tank, Nesta, calls the “tenant state” – a government that pays rent to access its own data, its own systems, and increasingly its own operating capacity. Tidied up public data sits on third party platforms. Systems cannot talk to each other without expensive integration. Departments become locked into suppliers. Government cannot see, move, audit or build on their own information without paying a third party.
The same principles apply beyond software. We need engineers in the room when decisions are made about physical infrastructure such as energy, housing, and defence. Britain has no shortage of brilliant engineers. What it lacks is a governing culture that consistently treats engineering as central to policy. This matters even more in the age of AI. AI is not magic dust that we can sprinkle on broken institutions. If we try to become “the fastest adopter of AI in the G7” while behaving like a tenant state, it will be an eye-wateringly expensive automation of dysfunction.
This does not mean government should do everything itself. It should work with companies, universities and outside experts. But it must have enough technical capability on its own side of the table to do this well, and that means engineers at the heart of government. A state that spends tens of billions on technology but will not pay properly for engineering talent is not being prudent. It is being penny-wise and billions-foolish.
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