The UK Government has unveiled a new blueprint for AI regulation, designed to supercharge innovation, boost economic growth, and ensure AI technologies are developed and deployed safely across key industries.
Announced today by Technology Secretary Liz Kendall at the Times Tech Summit, the plan marks a pivotal moment in Britain’s race to lead the global AI revolution.
By cutting red tape and allowing companies to test AI products in controlled real-world environments, ministers hope to accelerate breakthroughs in housing, healthcare, transport, and advanced manufacturing.
Kendall explained: “To deliver national renewal, we need to overhaul the old approaches which have stifled enterprise and held back our innovators.
“We want to remove the needless red tape that slows progress so we can drive growth and modernise the public services people rely on every day.
“This isn’t about cutting corners – it’s about fast-tracking responsible innovations that will improve lives and deliver real benefits.”
Testing AI in ‘sandboxes’
At the heart of the new framework is the creation of AI sandboxes – safe testing zones where selected rules can be temporarily relaxed under strict supervision.
These sandboxes will allow innovators to experiment with emerging technologies without breaching core safety or ethical standards.
Initially, the AI sandboxes will target vital sectors including healthcare, professional services, robotics, and transport. The initiative aims to deliver practical benefits such as faster medical treatments, smarter manufacturing, and more efficient public services.
For example, AI tools tested in a healthcare sandbox could help clinicians diagnose illnesses more quickly and reduce NHS waiting lists.
In the housing sector, AI-powered planning software could slash the average 18-month approval period for new housing developments – helping to realise the government’s ambition of building 1.5 million new homes by the end of the current Parliament.
Boosting growth by cutting bureaucracy
The move aligns with wider government efforts to modernise the UK’s regulatory system.
Speaking at the Regional Investment Summit, the Chancellor confirmed plans to cut unnecessary admin tasks, potentially saving British businesses £6bn a year by 2029.
By pairing this deregulatory push with targeted AI testing, the government hopes to create a dynamic environment where innovation can thrive.
The forthcoming AI Growth Lab will play a central role in piloting responsible AI applications and generating real-world evidence of their benefits – removing barriers that currently slow down deployment.
Safe innovation with strong safeguards
While the new AI regulation blueprint promotes flexibility, it comes with firm guardrails. Each sandbox will operate under a strict licensing scheme overseen by regulatory and technical experts.
Testing will be time-limited and closely monitored, with the power to halt any trials that pose unacceptable risks or breach terms.
Importantly, the government stresses that these initiatives will not allow AI systems to make unchecked decisions. Human oversight remains central to the process, particularly in sensitive sectors such as healthcare and finance.
Real-world examples already driving change
Early examples of regulatory sandboxes are already showing their potential. The Information Commissioner’s Office (ICO) has worked with tech firm Yoti to refine AI-powered age estimation tools that help protect young people online.
Another trial supported FlyingBinary, which used AI to enhance digital services for mental health patients.
Meanwhile, the Medicines and Healthcare products Regulatory Agency (MHRA) will receive £1m to explore how AI can accelerate drug discovery, clinical trials, and licensing decisions – improving consistency and efficiency across the system while keeping experts firmly in control.
Building on UK leadership in regulatory innovation
The UK has a strong track record in pioneering flexible, pro-innovation regulation. The Financial Conduct Authority’s 2016 fintech sandbox was the first of its kind globally and has since been emulated by countries from Singapore to the United States.
Today’s announcement reinforces Britain’s ambition to stay at the forefront of AI regulation and global best practice.
Other jurisdictions, including the EU, Japan, and Estonia, are also rolling out similar frameworks – but the UK’s model aims to balance agility with accountability.
A public call for views
To shape the next phase, the government will launch a public consultation on how the AI Growth Lab should be structured — whether it should be run centrally by the government or independently by regulators.
This collaborative approach is designed to ensure that businesses, researchers, and citizens all have a say in shaping the UK’s AI future.
The economic opportunity ahead
AI adoption is still in its early stages, with just 21% of UK firms currently using the technology.
However, according to OECD estimates, AI could boost UK productivity by up to 1.3 percentage points a year, equivalent to an annual £140bn uplift to the economy.
With the new AI regulation blueprint, the government aims to unlock that potential by allowing innovators to move faster, safely, and with the public’s trust.
