Achieving government efficiency through financial innovation and transformation
AI and other technologies hold great promise to transform government finance processes. At a roundtable supported by Visa, held at Global Government Forum’s Innovation 2026 conference, participants discussed how to overcome the barriers – including data quality and legislative complexity – and embrace opportunities
The growing role of artificial intelligence was among the focus areas of a roundtable exploring the potential for government financial innovation.
The 2025 Spending Review, which requires departments and agencies to reduce their administration budgets by at least 16% in real terms by 2029-30, formed the backdrop of the discussion.
“2030 sounds like a long way away but, actually, it’s coming round soon,” observed one attendee.
Participants acknowledged the enormous potential for new initiatives and solutions across the public sector at both a central and local level, particularly those involving AI.
As one participant noted, the use of AI allows teams to “refocus expert human time on the most important issues”, for example helping vulnerable people.
But the same participant referred to a “cultural” problem in parts of the public sector where there is a tendency to hire people to try to solve gnarly problems instead of putting maximum faith in the technology itself. “Within government I don’t think people are quite ready to move away from that,” they said.
Birmingham and Manchester examples
Discussion of the opportunities created by the data fuelling AI saw participants raise examples of specific innovative initiatives.
These included a local government innovation hackathon on homelessness and rough sleeping in Birmingham organised by the Ministry of Housing, Communities and Local Government (MHCLG), GDS Local, the Local Government Association and Birmingham City Council; and the Greater Manchester Combined Authority’s use of pseudonymised Department for Work & Pensions benefits data to map economic inactivity and target support services.
Data quality is fundamentally important but problems are widespread. “People are still using spreadsheets,” one participant observed. “To enable data to be ‘AI-able’, we need to have that mature data system across government.”
Another added: “We don’t want to, as government, just put AI over a heap of rubbish – it won’t solve the problem. There’s a lot of work – and there needs to be a lot of endurance – to do that data work.”
Legislative complexity
The relative complexity and inconsistent interpretation of legislation was also discussed at the roundtable, with agreement that a widespread fear of breaching rules often leads to risk aversion.
“We have particularly complicated legislative frameworks around all things in this country,” said one attendee, describing the ‘layering’ of legislation over the past 50 years, and contrasting the UK’s situation with the legislative blank canvas found in digital government poster-nation Estonia.
But there has been progress over the past decade. The Digital Economy Act 2017, for example, was highlighted as allowing data sharing for the purpose of reducing debt owed to the public sector.
A further – arguably typically under-discussed – obstacle to cross-government progress was also raised: the extent to which different parts of the public sector are actually incentivised, culturally, to push their ideas more broadly.
“There is a definite incentive issue with the intersection between national and local,” one participant said, referring to a pilot project that “took much longer than it should have”.
“I think the reason is that if you’re sat in a central government department and somebody says ‘this is a really good project, it will make a local authority £10m extra a year’, that does nothing for you, really. You’re like, ‘well, it doesn’t benefit my department…’,” the participant said. “So I do think that, potentially, there must be a way to think better how you can incentivise central government decision-makers to do things on behalf of local government.”
“Local authorities, by design, are independent,” another participant said. “They don’t want to be dictated to by central government. We have to really work on co-design.”
In this regard, it was felt that GDS Local is a welcome development. The specialist unit created in November 2025 within the Government Digital Service works with and alongside local government to deliver the ambitions set out in the Blueprint for Modern Digital Government, published in January 2025.
Payments innovation examples
The discussion also touched on the specific topic of payments to vulnerable people. A representative from Visa, which supported the roundtable as knowledge partner, pointed out that payment cards allow the collation of anonymised and aggregated data across a cohort to enable authorities to observe “drawdown patterns” over, say, a two-week or monthly cycle. This data can be used to inform measures designed to help benefits recipients better manage their money between payments, for example.
Technology can also be used for benefits eligibility assessment. The example was given of a European Union member state using open banking technology for this purpose – specifically, to “triage cases for specific investigation a lot faster and a lot more accurately”; and, similarly, open banking’s potential use for government employee risk assessments.
Returning to artificial intelligence, one attendee brought attention to how it could be used in practice, highlighting that it can be useful for AI to make a recommendation – for example, ‘red’, ‘amber’ or ‘green’ – towards a decision. “It helps to inform the decision, rather than make the decision, which helps with transparency and explainability,” they said.
Other examples of innovation mentioned during the discussion included a state government in Australia making sizeable “back-end” savings in procurement by moving to digital payments through a “local card” scheme; and payments innovation by PagoPA, a state-owned company that builds and manages digital technology infrastructure for Italy’s public sector.
Payments digitisation potential
All in all, there is clearly a long way to go to realise the opportunities – and avoid mishaps – in the space of payments innovation.
In the UK specifically, one participant described one significant government department’s payments experience as being a “basket case” for users; another aired an HM Revenue & Customs anti-fraud scheme that used Home Office flight data to try to identify cases where there was a risk that claimants may no longer be resident in the UK. A National Audit Office investigation is underway after thousands of families were wrongly stripped of child benefit payments.
Pilot activities and even hackathons – successful or not – are often yet to receive sufficient backing to be re-run or scaled up. “We’re just stuck in this perpetual proof of concept [phase],” one participant observed.
The conversation also highlighted the need for a robust conversation about trust and digital identity to accelerate digital transformation.
The ‘Achieving government efficiency through financial innovation and transformation’ roundtable, supported by knowledge partner Visa, was held at Global Government Forum’s Innovation 2026 conference on 24 March.
