The Treasury will fund a new £70m National Exposure and Real-Time Vulnerability (NERV) Centre to deploy AI tools that identify cyber vulnerabilities across critical national infrastructure and the wider economy, as part of a package of AI spending worth more than £600m to be confirmed in Wednesday's Budget.
The centre is one of four security measures announced on 24 October. which include £60m for a National Cyber Shield, which will use agentic AI to improve the UK's cyber defences and a £25m challenge fund for UK AI and cyber security innovators and scoping work for a new regulatory sandbox to support the deployment of agentic cyber security tools across critical national infrastructure, the public sector and industry.
The AI Security Institute will receive an additional £120m to continue testing new AI systems and developing technical standards for mitigating risk, and the National Cyber Security Centre will open an AI Cyber Security Centre of Excellence in Manchester to train government cyber and AI specialists.
Further details are yet to made available on how the NERV Centre will operate, which body will host it, what access it will have to public sector and private networks, or how its scanning activity will be governed. The government's release does not say which body will operate the proposed regulatory sandbox for agentic cyber security tools, or how that sandbox will relate to the Information Commissioner's Office's existing sandbox and to the security obligations on controllers and processors under UK GDPR.
Agentic systems operating across public sector and critical infrastructure networks will process substantial volumes of personal and operational data, and the package does not address the arrangements that will apply.
Security Minister Dan Jarvis said the investment would help the UK seize the opportunities AI presents for national security "while staying one step ahead of those who seek to use AI to do us harm". Former NCSC chief executive Ciaran Martin described the package as welcome at a critical time, saying this week had provided a stark reminder that AI exposes weaknesses in the digital world and brings new ways of exploiting them.
The largest single commitment is a £165m National AI Biosecurity Initiative, including £100m for an AI Biosecurity Lab (AIBL) to apply AI to the detection and surveillance of biological threats and £65m for bio surveillance and medical countermeasures for priority pathogens. The lab will be supported by up to £200m in AI model credits from OpenAI and Anthropic, alongside partnerships with Google DeepMind and Basecamp Research.
AI Minister Kanishka Narayan said the lab would be "a major new global institution" and that as AI becomes more powerful, Britain must have the capabilities to protect its people and shape its own future. Narayan said this meant staying ahead of emerging threats, from cyber attacks to biological risks, while building more of the critical technology on which security depends.
Elsewhere in the package, £30m will fund local AI partnerships with Mayoral Strategic Authorities to bring together councils, businesses, universities and colleges on locally led AI adoption in public services. The Sovereign AI Fund receives a further £60m, with another £60m for its R&D Procurement Scheme targeting challenges in health and care and in AI security, assurance and safe adoption.
A new UK Advanced Chip Design Academy will receive £18m, the AI Economics Institute £23m over three years, and £10m a year will fund work on how AI will reshape jobs and industry.
The Treasury cited existing public sector deployments as evidence of the approach, including NHS use of AI to analyse more than 210,000 chest X-rays a month and HMRC's digital assistant handling around 6.3 million customer interactions in 2025-26.
Chancellor John Healey said AI would transform every firm, community, hospital and school, and that he was setting out "a distinctively British approach" that defends the national interest while ensuring the benefits of AI-enabled growth are felt across the country.
The government's announcement can downloaded here: https://www.gov.uk/government/news/chancellor-unveils-britains-ambitious-plan-for-ai
