267. Can AI save the public sector?

Summary

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The Rest Is Money – Episode 267: Can AI Save the Public Sector?

Date: April 5, 2026
Hosts: Robert Peston, Steph McGovern
Guest: Alex Stephany, CEO of Beam

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Episode Overview

This episode examines whether artificial intelligence can revolutionize the public sector, focusing on the real-world experience of Alex Stephany, whose company Beam provides AI-powered tools for frontline workers. Peston and McGovern probe the barriers to adoption, particularly within UK central government, the dynamics of risk aversion, and what’s at stake for British tech innovation.

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Key Discussion Points & Insights

1. How Beam Uses AI in the Public Sector

[03:32 – 05:52]

• Beam started out delivering frontline services and saw an opportunity to use AI — specifically for automating and improving documentation and administrative processes.
• Their technology can transcribe meetings, auto-generate case notes, and draw on organization-specific rules, policies, or legislation for tailored advice.
• AI voice agents provide emergency advice and triage issues for follow-up, expanding support availability.

“Within a few weeks we could see that they were happier ... they were also able to see far more people with all of the time that that liberated for them.”
— Alex Stephany [04:13]

• Beam now supports around two-thirds of UK local councils’ social care teams and is used in approximately 130,000 meetings each week.

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2. Safety, Accuracy, and the Role of AI

[07:45 – 09:02]

• The technology is designed to augment, not replace, frontline workers.
• Workers review and approve AI-generated documentation, helping ensure accuracy and safety.
• Beam aims to alleviate the admin burden from overstretched, often underpaid, workers.

“Instead of having to create documentation from a blank piece of paper, they're able to get something out of the box within about three seconds of the meeting ending.”
— Alex Stephany [07:56]

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3. Selling to Central vs Local Government: Barriers and Frustrations

[09:02 – 13:09]

• Beam has strong uptake among local authorities but has struggled to break through with central government.
• A pilot with the Ministry of Justice (MOJ) showed promising results (70% reduction in admin time, universal improvement in documentation), but the MOJ chose to build its own solution rather than procuring Beam’s.
• Issues cited: lack of a formal procurement process, opaque decision-making, and “marking their own homework.”

“It felt a bit like they were marking their own homework and ... maybe it wouldn't be fully objective.”
— Alex Stephany [09:54]

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4. The Importance of Supporting Homegrown Tech (GovTech)

[15:00 – 19:02]

• Stephany outlines three reasons for a robust domestic GovTech sector:
  1. Competition: More suppliers mean better, more affordable technology for public services.
  2. Growth: GovTech both stimulates the economy and boosts public sector productivity.
  3. Sovereignty: Relying on UK companies builds internal capabilities and technological independence.

“You can think about Govtech as a kind of double whammy for growth … because growth is what's going to pay for our schools and hospitals and so on.”
— Alex Stephany [17:23]

• Despite policy rhetoric, UK tech companies often seem to come after US tech giants and in-house solutions in government procurement priorities.

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5. Risk Aversion in Procurement & The Need for Culture Change

[18:03 – 26:14]

• Discussion about the “safe” choices in procurement, e.g. established multinational vendors over British startups.
• McGovern and Peston connect this to wider economic implications and efforts to nurture British innovation.
• Beam’s experience reveals a gap between government policy statements and real contracting behavior.

“The reality of companies like us is sometimes that first choice is US tech, second choice is let's build it ourselves. Third choice is, okay, if we must, let's work with a UK startup.”
— Alex Stephany [19:02]

• The public sector’s caution is linked to a fear of unfamiliar risks, but this slows potential productivity gains.

“I think that there is a general risk aversion in the public sector and some of that makes sense because there are serious human risks associated with deploying AI in these contexts.”
— Alex Stephany [25:34]

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6. Quantifying Efficiency Gains

[23:28 – 24:26]

• Beam’s technology typically saves frontline workers about 8 hours of admin work per week — roughly a 20% productivity gain.
• This allows more time for face-to-face service delivery (with patients, service users, etc).

“A typical person using your technology to record notes or create reports, they'd be saving about 8 hours of admin per week.”
— Robert Peston [23:41]

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7. International Comparisons: Is the UK Falling Behind?

[25:19 – 26:14]

• UK is not lagging globally in public sector tech uptake, but progress is slower due to valid risk concerns.
• Other countries like Estonia are referenced as leading examples, but most governments are cautious with AI deployment.

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8. Policy Recommendations: Stories, Not Just Spending

[27:45 – 30:14]

• Stephany argues that beyond big numbers, people need compelling stories about real-world improvements.
• Calls for more active, fair, and speedy procurement—breaking down protectionist barriers benefitting incumbents.

“Procurement may be broken for UK startups. Dormant is working beautifully for lots of incumbent interests and so there are plenty of stakeholders that actually don't have the incentives to change ...”
— Alex Stephany [29:10]

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Notable Quotes & Memorable Moments

• On Government Inertia: “As it is, millions of pounds of taxpayer money has been spent to replicate technology that already exists. But the main thing is that every single day that passes, millions of pounds of taxpayer money is also squandered because people don't have modern technologies.”
  — Alex Stephany [19:43]

• On AI Risk Perception: “You have to hit this tipping point, I think, where people are so very, very reassured before they hit the accelerator pedal on it.”
  — Alex Stephany [26:14]

• On UK Tech’s Place in Procurement: “So what I would say to the Government is ... It's probably time to roll up your sleeve and ... take a more active role in the procurement of these technologies and make sure that procurement is fair and fast.”
  — Alex Stephany [28:37]

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Hosts’ Reflections

[30:31 – End]

• McGovern voices frustration at the government’s reluctance to adopt proven British tech, calling it “counterproductive” not to utilize existing solutions.
• Peston notes the discrepancy between procurement rhetoric and reality, comparing the US’s strategic government support for tech scale-ups to the UK's cautious, sometimes parochial approach.
• Both highlight the need for calculated risk-taking and a culture shift in public sector investment to foster innovation and economic growth.

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Key Timestamps

• 03:32 – 04:47: Beam’s origin, how their tech works in councils
• 07:45 – 09:02: Augmenting (not replacing) frontline workers
• 09:12 – 12:51: MOJ pilot story, procurement frustration
• 15:00 – 17:23: Why building UK GovTech matters
• 23:36 – 24:26: Statistical impact—8 hours/week saved per worker
• 25:34 – 26:14: UK’s pace vs international peers, risk aversion
• 28:05 – 29:10: What government should change: stories over stats, smarter procurement
• 30:31 – 32:55: Hosts’ summary, MOJ reply, policy context

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Overall Takeaway

The episode offers an in-depth, candid look at the challenges of bringing AI to the UK public sector, with Alex Stephany offering practical insights into the opportunities and frustrations involved. It makes a strong case that while councils have led the way, central government’s risk aversion and procurement barriers are stifling faster progress. Hosts and guest alike call for a fairer, more growth-oriented approach — one that backs homegrown tech and delivers real, story-driven benefits to citizens.

Transcript

[Alex Stephany]

That narrative somewhat holds us back. There is a general risk aversion in the public sector and some of that makes sense because there are serious human risks associated with deploying AI in these contexts.

[Robert Peston]

But you're saying that nonetheless, despite the fact that there hasn't been a problem of that sort, you understand the risk aversion.

[Alex Stephany]

Probably one of the most consequential technology decisions that the MOJ has made in years, if not decades, tested our technology, then told us they're building their own technology. The sort of the safety level. It's not just a about which is better, which is safer. You have to hit this tipping point, I think, where people are so very, very reassured before they hit the accelerator pedal on it.

[Robert Peston]

Hello, and welcome to the Rest Is Money with me, Robert Peston.

[Steph McGovern]

And with me, Steph McGovern. Now, today we are talking about AI being used council services. We've got the CEO of Beam On, Alex Stephanie, and he's really interesting because he's developed this business which the tech of it is used by two thirds of councils to help them be more productive. So basically what this Beam technology does is it documents meetings and then it kind of powers advice and insights for those working in areas like working with helping people find jobs or helping people who are homeless find somewhere to live. And those, those are the types of people who are dealing with lots of information being thrown at them and not much time to then process it all and write the correct documentation needed to get them on the right track. So it's basically doing all the admin work that often holds people back. And it's a business that he's seen really grow. And as I say, two thirds of councils are using it. But what's interesting about talking to him, Robert, is the carry on is what I want to call it when it comes to trying to get central government to take on this innovative technology.

[Robert Peston]

That's exactly right. And we've talked so often on this podcast and ministers talk so often in public about how the productivity of the public sector could be massively improved by adopting new technology, especially AI. So talking to somebody at the coal face about how easy it is to sell AI to the government is definitely a conversation worth having. By the way, we also point out that when you are implementing a new technology, particularly artificial intelligence, there are risks. And we have seen actually around the world over the last few years, implementation, for example, in the States, facial recognition led to the wrong people being arrested. In the Netherlands, the rollout of a particular set of algorithms which was assessing whether or not People deserve to get certain kinds of benefits. And actually, actually a lot of people lost money that they should have been given. So, you know, there are risks when it comes to rolling out AI, but there are also significant benefits. And so, you know, this interview is all about trying to assess whether the government is managing what will be an inevitable re engineering of the public sector, whether they are managing that in an optimal way.

[Steph McGovern]

So here's Robert's interview with Alex Stephany, CEO of Beam.

[Alex Stephany]

Our story is pretty unique. So we started out actually delivering frontline services ourselves with teams of caseworkers. We had councils all over the UK, ChatGPT was out and we realized, look, why don't we just make a technology that supports our teams to do all their documentation? That was what the infrastructure was built on in the first version. So they could record the meeting, press a button and hey, presto, they've got a really accurate case note. By this time, the frontline team had manually written, I think, about 600,000 case notes, right them out letter by letter. So very pleased to have this technology. And within a few weeks we could see that they were happier. Our friends and colleagues were cheerful to not have to do this type of manual work that none of them really had signed up for. And they were also able to see far more people with all of the time that that liberated for them. And so we realized that this is enormously applicable to lots of other frontline teams. So we began supplying councils. Fast forward to two thirds of councils use our tech for their social care teams and it's used for about 130,000 meetings every week.

[Robert Peston]

Essentially it's a transcription service, so it

[Alex Stephany]

creates very specific types of documentation. So we've produced around 2,000 types of social services or frontline services documentation, but it does a whole bunch of other things as well. So it powers advice and insights using what we call a knowledge base of, of guidance or legislation that's relevant to that specific organization. We're also providing AI voice agents. So that means that, say it's the middle of the night and that lady that we mentioned before has become homeless. She can phone a number at three in the morning and she can get advice there. And then, then what the technology does is it will assign the risk to that. And then when someone gets to work the next day, they can see, okay, there's been 18 conversations overnight. Here are the top priority ones. Here's a summary of what the situation is and they can get on the phone as soon as possible and move them forward.

[Steph McGovern]

We're delighted to Say that this year, the Rest Is Money is being powered by Octopus Energy. And that means we get to welcome back the founder of Octopus Energy, Greg Jackson, now CEO of it. Time for a quick fire question. What's the one bit of advice you give a young entrepreneur? Maybe it's stuff that people don't normally talk about.

[Robert Peston]

Don't be arrogant, but do be confident.

[Alex Stephany]

Almost by definition as an entrepreneur, you're

[Robert Peston]

doing stuff that other people didn't think

[Alex Stephany]

is going to work or they've discounted or dismissed.

[Robert Peston]

So you have to be confident to

[Alex Stephany]

believe in your own ideas and your ability to deliver them. But you should still listen to everyone else and learn from them and not be arrogant. I think that is the secret to being able to build something special but successful.

[Steph McGovern]

Well, cheers, Greg, and thank you for powering this episode of the Rest is Money.

[Alex Stephany]

I sold my car in Carvana last night.

[Steph McGovern]

Well, that's cool.

[Alex Stephany]

No, you don't understand. It went perfectly. Real offer down to the penny. They're picking it up tomorrow. Nothing went wrong.

[Robert Peston]

So what's the problem?

[Alex Stephany]

That is the problem. Nothing in my life goes as smoothly. I'm waiting for the catch.

[Robert Peston]

Maybe there's no catch.

[Alex Stephany]

That's exactly what a catch would want me to think. Wow. You need to relax. I need a knock on wood. Do we have wood? Is this table wood? I think it's laminate. Okay. Yeah, that's good. That's close enough. Car selling without a catch.

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[Robert Peston]

Particularly with sensitive notes of this sort, there are always going to be anxieties that it won't be perfect, that there will be mistakes. How do you minimize those?

[Alex Stephany]

Well, a few aspects to that. So the first thing is that this is not replacing frontline workers. So this is about augmenting frontline workers. So instead of having to create documentation from a blank piece of paper, they're able to get something out of the box within about three seconds of the meeting ending. That's nine out of ten. And then they spend their time reviewing and improving that documentation where they see any potential for Improvements.

[Robert Peston]

So you don't have any products of that sort that actually replaced, you know, you're not in the business yet of creating agents of an AI sort that replace people.

[Alex Stephany]

No, we're about augmenting very overstretched teams. So you can be almost anywhere in the world and you can be speaking to people in frontline services and realize that they are struggling to hire people, they're struggling to retain people. And that's because these jobs are often very difficult. It's really, really hard work. It's really stressful. They're often not tremendously well paid. And as discuss, they're often characterized by very high levels of administrative work.

[Robert Peston]

I think you said you're working with someone like 70% of local authorities. Do you yet have any contracts with central government?

[Alex Stephany]

Not yet. So in terms of central government, what happened was some actual probation officers got in touch and said, this looks really great. We're smothered in paperwork and our jobs are really, really tough. Can we use it? So we did a pilot with the Ministry of Justice. Like most of these types of pilots, they're very loss making for the companies. So we knew that it would cost us well over £100,000, maybe £200,000 to actually do this piece of work.

[Robert Peston]

And you do this at your own risk?

[Alex Stephany]

We do it at our own risk. And you know, we also offered to provide the technology at cost as well.

[Robert Peston]

Why are you offering it at cost?

[Alex Stephany]

We'd spent years trying to work with central government and we, we really don't want cost to be any kind of barrier. So probation piloted this tech. There was a glowing assessment of it which found that it was leading to a 70% reduction in time spent on admin. 100% of people found improvements in their documentation while the pilot was ongoing. MOJ requested lots of pretty commercially sensitive documents about how our technology is structured and how we adopt and train people on it. They then told us that they're going to be building their own version of it and also going to be heavily involved in evaluating which one they preferred. And we were kind of worried that it wouldn't be a completely level playing field. To be honest, it felt a bit like they were marking their own homework and that maybe it wouldn't be fully objective.

[Robert Peston]

So I do remember when I was talking to David Lammy about it, he personally very energized by the prospects of adopting AI to improve the efficiency of the justice system. In fact, he's now talking about it in terms of his court reforms, as you probably know. And I also Remember when talking to his officials at the time that they absolutely insisted there was a sort of level playing field between you and their internal team. I mean, I guess my point is just a more general point, which is this issue around. There are definitely strong public policy reasons why you need to encourage. I'm not making a case for you, but just in general, it really matters that procurement is a tool of industrial policy in this country, and that means using procurement to actually create a more vibrant, growing tech sector.

[Alex Stephany]

Well, I guess on that point of procurement, it's probably worth saying that there wasn't a procurement for the technology for probation officers. It's probably one of the most consequential technology decisions that the MOJ has made in years, if not decades. And they didn't go to procurement. I think it would have been a good idea if they had.

[Robert Peston]

So what was it then? If it wasn't to procurement, what the hell was it?

[Alex Stephany]

They tested our technology. They then told us they were building their own technology. And then they told us that they wanted to use their technology, which still hasn't been rolled out widely. And we've tried to understand some fundamental things about how they chose their technology. Obviously, we spent the best part of a year working on it, and it lost a lot of money doing so. But ultimately they don't answer the questions. We did have a meeting with them, which they canceled at the last minute. So it's difficult to say how fair it was. One hopes it was. Of course.

[Robert Peston]

Alex, tons more to talk to you about. We're gonna go to a quick break, but after that, we will really drill down into why there is so much resistance within the government to backing homegrown British tech Talent

[Steph McGovern]

K Pop Demon Hunters, Haja Boys Breakfast Meal and Hunt Tricks meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, roomie?

[Alex Stephany]

It's not a battle. So glad the Saja Boys could take

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breakfast and give our meal the rest of the day.

[Robert Peston]

It is an honor to share.

[Alex Stephany]

No, it's our honor. It is our larger honor.

[Robert Peston]

No, really, stop.

[Steph McGovern]

You can really feel the respect in this battle. Pick a meal to pick a side

[Alex Stephany]

and participate in McDonald's while supplies last.

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[Robert Peston]

there is another issue. It's one we talked about quite a lot on the podcast, which is, you know, we do have in this country a really very lively technological sector, mostly sort of small, medium growing companies. And if you look at essentially faster growing economies across the world, one of their characteristics is that you have public sectors that are imaginative and creative in favoring successful local growing businesses. Actually, for years the British government has talked about trying to procure from businesses like yours, but then in practice, it doesn't seem to happen. So why is it in the end, do you think? I mean, you've done very well with local government, but why do you think central government routinely favors big tech, routinely favors the likes of Microsoft, for example, but a company like yours struggles to get a foot in the door.

[Alex Stephany]

Very happy to speak to that. But maybe let's just take a step back and ask the question, why does this matter? Which I think is not obvious always. And we are what you would call a govtech company. Now, I'm sure your listeners have heard of fintech. We're govtech. So what does that mean? It means that we supply largely government customers. We build technology for government customers. Now, I think you want to have a vibrant govtech sector for at least three reasons. The first is that the more companies you have building technologies, ultimately the more competition and the greater likelihood that people who are delivering these crucial public services are going to have good technology. That's going to be driven by competition. And everyone benefits when people have good technologies, ultimately we're all paying taxes for that. The second Reason is growth. Now, Govtech's really interesting because what we're doing is fundamentally creating economic growth because we're a group of businesses, but we're also allowing the government to be more efficient, to find new productivity. So you can think about Govtech as a kind of double whammy for growth. And that's why we need to really encourage the sector, because growth is what's going to pay for our schools and hospitals and so on. And then the third reason is I think it's important that we have internal capabilities when it comes to these fundamental technologies and services. If we are, as you say, just relying on foreign built technologies, that doesn't put us in a great position in the long run. And I think you're right that it can feel as if UK technologies are not first choice. In fact, maybe they're not even second choice.

[Robert Peston]

But is it just because the officials who are in charge normally of the procurement process are just risk averse, that you know, you know, broadly? It's quite hard, you know, if you're buying from Accenture or if you're buying from Microsoft. Everybody knows the brand. It's sort of tried and tested. The risk of you being criticized for it going wrong, even if it does go wrong, is sort of minimal because then they'll say, but hang on a second, how was I to know that this particular contract was going to go wrong given the reputation of the company? Is it just that they are just terrified of a company like yours, which they've never heard of before, failing, and therefore they're not going to take the risk?

[Alex Stephany]

On the one hand, you have politicians who authentically want UK AI champions. I have no reason to doubt that is the case for the Prime Minister and many other people and many, many people in the civil service.

[Robert Peston]

So why isn't he able effectively to push that down the chain into actual contracts?

[Alex Stephany]

You're right that the reality of companies like us is sometimes that first choice is US tech, second choice is let's build it ourselves. Third choice is, okay, if we must, let's work with a UK startup. Now why does that happen? I don't think it's a universal thing across the civil service, but I think that there are some pockets of the civil service that are just not on board with that.

[Robert Peston]

Is it that they resent the fact that you're probably gonna make a fair bit of money out of it? Is there an anti commercial thing going on?

[Alex Stephany]

It's difficult for me to know.

[Robert Peston]

If they'd chosen you, you could have rolled that out to their 9,000 probation officers, the ones who haven't got it at the moment, they'd have it now, would they?

[Alex Stephany]

Absolutely, yes. They would have had it in weeks. As it is, millions of pounds of taxpayer money has been spent to replicate technology that already exists. But the main thing is that every single day that passes, millions of pounds of taxpayer money is also squandered because people don't have modern technologies. So you will have to ask them why they made that decision. I think we and every other company has absolutely no right to any government contract. I want to be clear about that. But what we all do need as a country is to make sure there's a level playing field so that the right decision is objectively and fairly made. And by the way, I think it's also important to note that some of the time it's exactly the right thing for the public sector to build their own technology. It's certainly not always the case that they should be relying on the private

[Robert Peston]

sector in terms of what your technology can do. Anybody who's used, you know, going to a hospital recently or go and see a GP or indeed had a deal with the police, we still see in those organizations astonishingly clunky processes for making notes, you know, taking witness statements or writing down, you know, the symptoms of a, of a patient. Is your technologies, in a sense, flexible enough and accurate enough to be usable for law and order or health? Is that something you're looking at?

[Alex Stephany]

Yes. So it's something we already do. So really our specialty is frontline services. So that covers all these types of things. And we have hired people who are probation officers, work coaches, who have left those professions because they were kind of didn't enjoy the reality of that work doing admin. So definitely it's all about how you take this core technology and then how you tailor it to very specific workflows. So we have just had a team of people flying around the US working with government bodies there in California, in Colorado, to customize our technology to specific workflows. And one of the things you see when you do this enough is that people are people to a degree. So the services you would provide to an elderly, isolated person in London are very similar to what you would provide in Paris or Boston or wherever. But there are all kinds of endless nuances in terms of rules, guidance, guidelines, et cetera. And so you have to heavily customize the technology. And so we use what's sometimes called a forward deployed engineering model where people will actually go inside of these organizations and really co design the Software with people doing the actual work. And as you will know, with things like Claude code and cursor, it's now becoming so much quicker and easier to actually build technology that is highly customized to partners.

[Robert Peston]

Just wondering if you've had any conversations here, you know, with the police service or with the nhs.

[Alex Stephany]

We work with various different NHS trusts and we're also speaking to different police forces in the UK and Australia as well. But, yeah, you're absolutely right, Robert, that this technology is very malleable to different frontline services. Employment services is another big area. So working with employment services, those are often private companies that the government outsource to support their frontline teams.

[Robert Peston]

And do you have any data on how much more efficient an individual becomes, what the productivity gains are?

[Alex Stephany]

So it would typically be around eight hours a week. So usually.

[Robert Peston]

So you save. So a typical person using your technology to record notes or create reports, they'd be saving about 8 hours of admin per week.

[Alex Stephany]

Yes, exactly. And it's that stuff, but it's also general workflow. So if they need to make a referral, write emails, anything to do with their sort of organizing their time, getting advice, which they usually would have to do from a manager, they can now get support from the technology, they can ask it a question and it will tell them what is the policy around this within our organization. So it's a whole load of. It's like a chatbot type thing where they can talk to it and they can say, I need an email for this, I need some advice on that. And the technology will give it the.

[Robert Peston]

To, you know, just in crude numbers. This is like a 20% productivity gain, freeing up of time for what we all want more of which is, you know, a public servant actually spending time with the patient, or I hate the word customer in the context of the. Of the public sector, but basically, you know, spending time with people who actually need their services. I mean, that is such an enormous savings in the context of a government which is really struggling to fund public services at the moment. Are you surprised that this is not supposed to be an advert for you, but are you just surprised by how long it is taking to roll out these sorts of services throughout the public sector?

[Alex Stephany]

It's been very swiftly adopted by councils.

[Robert Peston]

And if you look around the world, are there public sectors which are well ahead of the UK people always talk Estonia, for example. I mean, are there public sectors around the world which are way ahead of us in terms of digitizing and improving productivity through the use of technology?

[Alex Stephany]

I mean, I Think overall the UK is doing reasonably well. I think, you know, I don't think there are many examples of governments that have raced ahead. I think that there is a general risk aversion in the public sector and some of that makes sense because there are serious human risks associated with deploying AI in these contexts. So you don't want to necessarily be the first to roll out these types of technologies.

[Robert Peston]

But you're saying nonetheless, despite the fact that there hasn't been a problem of that. So you understand the risk aversion?

[Alex Stephany]

Yeah, I mean, I think people are just nervous around risks that are less familiar. Right. And you see this in self driving cars. So ultimately, if self driving cars are profoundly safer, like we know this, we have enough data, but people would still be more worried by getting killed by a self driving car or you know, one death would be disproportionately covered in the media. And so the, the sort of, the safety level, it's not just about, you know, which is better, which is safer. You have to hit this tipping point, I think, where people are so very, very reassured before they hit the accelerator pedal on it. But I think that the UK can go faster, can be a global leader in the deployment of AI in the public sector. I have not given up hope partly because of the success we've had with local government and our headquarters is still in London and we're still regularly talking to government and hopeful that we'll roll out DWP and maybe we'll get an opportunity to provide our technology to the thousands of probation officers that still don't have any. So we will have to see, I mean, particularly within frontline services and social services, we have a very proud legacy in the uk. If you go back to the Beveridge Report and after the Second World War, we invented concepts and we rolled out programs that made an enormous difference for millions of people in the UK and by being copied around the world for probably hundreds of millions of people around the world as well.

[Robert Peston]

If you, if there was just one decision that a Prime Minister and Chancellor could take right now, that would make all the difference to. I'm not sure I love the expression govtech, if I'm honest with you, but we know what you mean. To really put Britain at the forefront of govtech, what would it be?

[Alex Stephany]

I think there's lots of stories of investments. We've attracted £5 billion for this, £10 billion for that and so on. I think think people are a little bit numb to these numbers that come at them all the time. I Think what people need are stories and they need to see actual services that they use improving. The story that the Prime Minister by all accounts keeps coming back to is the story of how our technology is being used by social workers up and down the country.

[Robert Peston]

You mean your beams technology?

[Alex Stephany]

Beams technology? Yeah. From the Orkneys to the Isle of Wight, it's being used all over the UK and, and that is a good story because it's about how services are getting better for vulnerable people and we need more stories. So I think what I would say to the Government is things have been going somewhat slower than you probably wanted. It's probably time to roll up your sleeve and to try and take a look at why that has been happening and to take probably a more active role in the procurement of these technologies and make sure that procurement is fair and fast and that the best possible technologies at the best possible prices are getting into the hands of people delivering public services. One other thing I would say to that is that there is this narrative which is kind of procurement is broken and everyone knows it and everyone's trying to fix it. It's just taking time because it's so complicated and so on. I think that that narrative somewhat holds us back because the reality is that procurement may be broken for UK startup. Dormant is working beautifully for lots of incumbent interests and so there are plenty of stakeholders that actually don't have the incentives to change a thing about the way that we buy technologies for the public sector. And I think we need to actually lean into that, accept that and work out how we change that if we want to be living in a country where we're getting the best technologies at the best prices to people who need them.

[Robert Peston]

Really good to see you. That was fascinating.

[Alex Stephany]

Thank you so much, Robert.

[Robert Peston]

So that was my conversation with us, Alex, Stephanie. Annoyingly, Steph was doing something probably more exciting, although I did really enjoy that conversation. But nonetheless you weren't there. You have though now listened to it. What did you make of it?

[Steph McGovern]

What I found fascinating was what Alex has done with the business is clearly found a solution to a big problem in terms of productivity for people doing really important things. You know, we're talking about council workers who are trying to find people homes, so trying to find people jobs. Exactly what you and I always talk about in terms of, of getting economic prosperity and anything to improve the productivity of that seems like a no brainer and that's why loads of councils are using it. But what was interesting was the fact that central government are so reluctant and it's as if, you know, the way Alex described it as. It's not even like it's these UK tech firms second in the line after the US ones, it's third after the government have had a go at themselves. As if. And that just feels counterproductive. And obviously there needs to be due diligence, so there isn't problem profiteering from tech companies. And obviously all of that stands. But if the tech's already there, why would you waste time then trying to do it yourself? Just use what you've got there. By a British company which is providing jobs and, you know, money to the Exchequer. So what that, that's what came to me is how does procurement work? Because, Robert, we've heard Rachel Reeves only recently talk about how important it is to procure from UK companies and not let it just go abroad, haven't we?

[Robert Peston]

Yeah, and that's precisely right. I mean, in our last episode we talked about her growth plan, her Mays lecture. In that Mays lecture, it actually had the following words. We want public procurement to become a launch pad for scale ups. She means British scale ups, British companies, not just a check for global incumbents. Now, let's be clear. Palantir, right now, if you talk to a small British AI company and you look at government procurement, you say they give a ton of money to Alphabet, Google, they give a ton of money to Palantir. We really struggle to get in. And that was Alex Stefani's message that, you know, he is finding it now easier to sell to governments outside the UK than to our own government, despite the fact that the Chancellor claims that she wants to favor businesses like his. But we have talked to the MOJ to find out why they didn't, in the, in the end hire Beam and Stephanie. What did they say?

[Steph McGovern]

Well, they sent a lengthy reply in classic right of reply style, so I'm just going to paraphrase it for you, but basically they're saying, and you won't be surprised to hear this, they build or buy tech based on value for money to tax pay. Good, that's what they should be doing. And they talk about Beam's involvement being limited to two small regionally run pilot projects, which they say were awarded through these proper low value contracts, both of which have now ended. And then they say that, you know, they're not required to carry on with Beams technology after the pilot. And then they talk about how. But they do work openly with many UK small and medium sized tech firms and cite a couple of recent collaborations to do with counter drone technology. But that is a classic example where to me, there doesn't seem to be a credible reason not to have used Beam, given they still not using it in the way they were going to use that tech for probation officers now, because, as Alex said, it could be used now and be making a difference to those probation officers work now rather than. We're still waiting for whatever tech the government have created to roll out.

[Robert Peston]

To be clear, I think if you work in public procurement, it's a really difficult job. The thing, though, that has worried me, and I'm not saying this is what happened in this case, but one of the things that over many, many, many years has worried me about procurement in this country is that when it comes to the final decision, if you are the accounting officer, as it were, you go with the safe option because broadly, if you go with Microsoft, who's going to blame you if Microsoft doesn't quite work out? Because everybody buys Microsoft. And it's how do we create a culture within government? Because procurement is so important when it comes to actually encouraging homegrown businesses. All you have to do to understand that is go and look, look at how Anthropic, which is absolutely now at the cutting edge of all AI development in America, right, has been in this extraordinary battle with the government about whether its services should be used by the Department of War over there. And it's a massive story, right? And Anthropic, in the end, stuck to its guns and decided that it wasn't gonna change how it operates to suit the Department, Department of War. But my goodness, you got the. When you were following that story, you realized how important that contract was to this enormous growing business. And the thing that American governments always understand, in the way that I don't think British governments understand, is how the sponsoring procurement power of government can make all the difference between whether a company stays small or, or sometimes fails or becomes a world leader. And my God, they use their commissioning might to favor American businesses and they do not favor British businesses. And we should see that. And we should therefore take the view in this country, if they are going to do patriotic procurement, we need to do more patriotic procurement. Moment here.

[Steph McGovern]

And just to add to that, it. This is very much like the chat we had with Stephen Welton from the British Business bank and also separately, a chat we had with Patrick Valance as well about taking risks with investments too. You know, like, yes, you're going to face scrutiny if those investments go bad. If you put money into a business, a British business that doesn't do very well, of course you're going to get scrutiny, but you've got to take more risks if we want to create more richer businesses here, businesses that can scale up and become multinational companies. And that was a point made by them. It's that risk. It feels like in procurement, there's a problem with risk taking there, too.

[Robert Peston]

Totally not blind risk, calculated risk. It's what this podcast is all about. Now, thanks for listening and we'll see you again soon. Bye. Bye.

[Steph McGovern]

Bye, bye.