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
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.
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.
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]
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]
4. The Importance of Supporting Homegrown Tech (GovTech)
[15:00 – 19:02]
- Stephany outlines three reasons for a robust domestic GovTech sector:
- Competition: More suppliers mean better, more affordable technology for public services.
- Growth: GovTech both stimulates the economy and boosts public sector productivity.
- 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.
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]
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]
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.
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]
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]
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.
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
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.