The abolition of the Department of Science, Innovation and Technology has drawn swift criticism from peers, industry groups and former advisers within hours of the announcement.
Ministers were summoned before the House of Lords less than a day after the machinery of government changes to DSIT were confirmed, with peers raising urgent questions about the restructuring.
One peer described the reorganisation as a “phenomenal waste of time” while another warned that “12 months is an eternity in AI”, underscoring the scale of concern across the upper chamber.
City AM understands the decision originated inside the Cabinet Office before being signed off by Burnham’s team, according to people familiar with the discussions, with both No 10 and DSIT refusing to comment.
The overhaul dismantles one of Labour’s central economic departments just a year after it was expanded to become Whitehall’s digital hub.
Science policy, UK Research and Innovation and the Sovereign AI Fund will move into Jonathan Reynolds’ new Department for Business, Innovation, Science and Trade under the restructuring.
The Government Digital Service returns to the renamed Department for Digital, Culture, Media and Sport, while the AI Safety Institute moves into the Office of the Prime Minister and Cabinet alongside a new AI taskforce.
The changes largely reverse one of Keir Starmer’s first Whitehall reforms in 2024, when Peter Kyle transferred GDS, the Central Digital and Data Office and the Incubator for AI out of the Cabinet Office and into DSIT.
Former DSIT adviser Ben Johnson told City AM the transfer had never been popular inside the centre of government, saying “it came from the cabinet secretary.”
“It effectively moved a central function out of the centre,” Johnson added, noting that “the civil service team have always been a bit annoyed about that.”
Johnson warned that tucking “science, AI and innovation into the Business Department where it has to compete with workers’ rights, steel and industrial strategy, it’s just not going to get a look-in.”
Cabinet Office minister Baroness Anderson defended the changes in the Lords, arguing that science and AI should no longer sit in a standalone department but be embedded across Whitehall.
“We should not see science and technology as an isolated issue,” she said, arguing the changes would create “a more coherent, agile and effective government framework.”
On BBC Radio 4’s Today programme, business secretary Jonathan Reynolds insisted science would be “at the forefront” of the enlarged department and that combining research with business and trade would improve commercialisation.
Startup Coalition and TechUK had warned Burnham before the changes were confirmed that dismantling DSIT would be “the wrong change at the wrong time”, citing risks to the AI Safety Institute and Sovereign AI Fund.
Startup Coalition executive director Dom Hallas questioned whether splitting responsibility across three departments would make delivery harder for an industry that demands focused ministerial attention.
Hallas said technology would now have to compete for ministers’ attention inside the enlarged business department while digital policy returned to a home alongside media, culture and sport.
“The abolition of DSIT is clearly a bad thing,” Hallas said, though he added that “if anyone could make up for it in Cabinet it would be Kanishka, who knows startups and the ecosystem better than anyone in government.”
That assessment partly explains why Burnham has elevated AI minister Kanishka Narayan to attend Cabinet, with Narayan set to jointly serve across the Office of the Prime Minister and DBIST.
Concern remains across the tech sector that the new structure could fragment responsibility for one of Britain’s fastest-growing industries at a critical moment for investment and international competition.