Andy Burnham becomes prime minister today, Monday July 20th 2026, with five reported tech policies looking set to shape his strategy for the UK IT sector — and its contractors.
Based on comments between July 2nd and July 19th made by either his team or Mr Burnham, who brings “real tech credentials” to the post of PM (TechMarketView’s Georgina O’Toole, June 26th), the five measures are:
1. Scrapping Digital ID cards
Burnham was reported yesterday (July 18th) to be dropping the Digital ID scheme.
The shift away from the ID scheme, projected at a contested £1.8bn over three years, was said to reflect the differing “daily priorities” of people across the country.
The cash and time investments set for the digital identity scheme, which was due to launch in 2029, will now go into “cost of living” issues, Burnham’s office also reportedly told the BBC.
Will temporary IT jobs be hit?
Some IT contractors might be disappointed at the prospect of digital ID cards no longer going ahead. The Association of Professional Staffing Companies (APSCo) is among those who told ContractorUK that digital ID cards were “highly likely to create IT contractor [job] opportunities.”
However, the advantage of a potential pipeline of tech contracts was offset for many freelance tech consultants because of their civil liberty concerns, despite Sir Keir Starmer agreeing to make the digital ID programme non-compulsory in January 2026.
The cards were also dropped as a prerequisite for Right To Work checks.
What does an IT project manager make of digital ID cards being dropped?
An IT project manager, sounding cautious of ‘Big Brother’, welcomed the now expected total dropping of digital ID cards.
“Shrewd move [by Andy Burnham],” the project manager posted. “No one was going to vote for you because you introduced digital ID. Some might because you cancelled it, though.”
Bottom line for IT contractors: The digital ID scheme contract pipeline some hoped for won't emerge, Right to Work checks are unaffected, and civil liberty concerns ought to ease.
2. Burnham keeps Palantir off the NHS contracts roster
Burnham’s decision as Greater Manchester mayor not to award Palantir Technologies any contracts during his nearly decade in office (2017-2026) is being seen as a harbinger of things to come for the US tech company.
Acknowledged by IT contractors to have pioneered forward deployed engineering, Palantir is currently under contract with the NHS on the £330m Federated Data Platform (FDP) project.
Another prominent left-leaning Labour mayor, Sadiq Khan, blocked a 50m AI deal between Palantir and the Metropolitan Police Service (MPS) in May 2026.
Could smaller suppliers step in?
Although the decision stemmed from MPS not properly considering alternative suppliers, the blockage has “created a market opportunity for other AI and data integration suppliers,” according to TechMarketView analyst Simon Baxter.
In his analyst’s note (June 23rd) obtained by ContractorUK, Baxter observed that Palantir has faced persistent scrutiny in the UK over ethics and strategic dependency, signalling potential implications for IT contractors working on the NHS, too.
But the potential ‘market opportunity for others’ if Burnham does continue to not grant contracts to Palantir, makes it an area to watch.
“As the owner of a small consultancy, I would love to have had the opportunity to be involved in a project like this,” wrote the co-founder of UK tech consultancy (MalyIT Solutions), referring to the NHS’s FDP contract.
Of the seven-year Palantir contract, which is up for renewal in 2027, the UK tech consultancy co-founder added: “Unfortunately, we don't have the lobbying capability of these large organisations.
“Also because of our [small] size, we are seen as a risk. However, we… [would] pay taxes, create employment, believe in the project, [and] provide real benefit.”
Bottom line for IT contractors: Palantir's grip on UK public sector work under Burnham looks set to loosen further, which, while a potential worry to those with temporary IT jobs on the NHS, is the kind of opening small UK tech services suppliers and rival integrators need to get ahead.
3. A UK-first AI strategy that pivots away from the US
Advisers to Burnham say they have developed a new AI and technology strategy, prioritising British ownership (including UK-owned data centres), tech sovereignty and protecting UK worker jobs from AI displacement.
Of the advisers’ claims, reportedly made to the Financial Times, a contract IT recruitment specialist sounds cautiously optimistic, but is also aware there’s a tightrope to walk.
The specialist, Kelly Macey, head of contract tech hiring at Reed, the recruitment giant, said last week, from her LinkedIn profile: “As AI becomes increasingly critical to economic growth, the challenge for policymakers….[like Burnham will be] finding the right balance between attracting investment, fostering innovation and ensuring the benefits are shared across businesses, workers and communities.”
The move to reduce the UK’s reliance on overseas tech giants for AI appears to have started while Sir Keir Starmer was still PM. For example, “A decisive shift to power British AI” — a £1.1bn hardware plan — was announced by the Department for Science, Innovation and Tech on June 8th 2026.
But an AI governance enthusiast, Burnham has quickened its pace, signals TechMarketView’s Georgina O’Toole.
“The [UK] digital transformation agenda, from legacy modernisation to defence technology investment to reducing dependency on a handful of US providers, was already moving — [just] more slowly than the rhetoric suggested,” O’Toole, partner of the respected IT analysis house began in a note, as part of its ‘HotViews’ subscriber service.
TechMarketView’s chief analyst, O’Toole added: “[Burnham’s] instinct for public governance over AI is a legitimate concern, shared well beyond the left. But regional digital leadership and delivering a national tech strategy are different disciplines.
“The tech sector will want to know quickly whether the instincts and impact he demonstrated in Greater Manchester can translate into national policy, investment and action. That question will shape confidence more than any political statement.”
Is a tech recruiter on board with the UK’s AI agenda?
Matt Collingwood, boss of tech contractor recruitment agency VIQU IT, observes that Burnham’s incoming ‘UK-first’ AI strategy coincides with OpenAI pausing its UK data centre project — part of its $500bn (£371bn) global Stargate programme — over energy costs and regulation.
Collingwood says: “If we're serious about becoming a global AI leader (and creating AI tech jobs), we need to create an environment where the world's biggest technology companies actually want to invest, build and grow here.”
VIQU IT’s managing director further told his followers: “AI is going to change the jobs market dramatically over the next decade. That's inevitable. The argument isn't whether disruption is coming, it's whether we're creating enough new jobs alongside it.
“As an IT recruiter, that's the bit I care about. If government is backing AI as part of the UK's economic future, then job creation, skills development and long-term investment need to be part of the conversation too.”
Bottom line for IT contractors: Some IT contractors in entry-level roles might welcome possible protections around AI job displacement, and the general refocusing on the UK, even if it was already in place under Keir Starmer, but potentially not at the cost of programme continuity or spending commitment rethinks, solely in the name of UK tech sovereignty, even if there is a sense the UK is playing catch-up with the US. Others warn that “Burnham will take the UK backwards on AI.”
4. Tougher Virtual Private Network controls on social media companies
Despite “limited evidence” of under-16s using VPNs to get around a ban on their social media access (Baroness Lloyd of Effra), a government consultation response published since Burnham was firmly on track to be PM proposes making sure social media companies “prevent VPN use among under-16s to access their services.”
Gary Thomas, senior partner at Gibraltar Company Formation, likens Burnham’s corresponding desire to reportedly put“measures in place” to a Trojan horse.
“It's the oldest trick in the political playbook: wrap sweeping new powers in the language of child protection and hope nobody notices the wider implications. VPNs are essential tools used every day by businesses, journalists, cybersecurity professionals and ordinary people who value online privacy.”
Thomas continued in a social media post. “Yet the countries that heavily restrict or ban… [VPNs] aren't exactly shining examples of liberal democracy.”
Will the UK actually ban VPNs?
UK technology secretary Liz Kendall said in an official statement on July 15th 2026: “VPNs have legitimate privacy and security uses and we will therefore not age-gate or ban them.
“Instead, we will put an onus on platforms in scope of the new restrictions to take robust steps to detect and prevent attempts by underage users to circumvent age assurance measures.”
Kendall added that the government will be taking action against AI chatbots and their impact on young people, by requiring mandatory breaks for under-18s using chatbots, ahead of government work with experts on how frequently, and for how long, the breaks should happen.
Bottom line for IT contractors: Mandating VPN providers to install age verification would have rebooted the Online Safety Act outcry (made in relation to pornography), with only small pockets of one-off work stints for a cadre of IT contractors, who are among those now distrusting that the government doesn’t want to go further to restrict VPN usage and warning that determined under-16s will resort to proxy servers, Tor or remote desktop services.
5. Make tech staff hiring cheaper for IT skills-employers
Burnham used a BBC Newsnight interview on June 5th 2026 to say the prime minister and chancellor ought to “listen” to business more, following his accusation earlier in the year that Labour “got it wrong” on small business taxation.
The MP for Makerfield also used the televised interview to restate his criticism of the employer NIC increase, effective since tax year 2025-26.
However, when invited to during his interview, Burnham declined last month to pledge to review the headline rate of National Insurance Contributions (NICs) for employers. And he said he wouldn’t rewrite Labour’s manifesto, which won the party the July 2024 general election.
Therefore, calls from employers’ organisations for employer NICs to return to their 2024-25 level have not been agreed to by Burnham, with no reversal or even a review committed to — despite headlines to the contrary.
How could lower employer NICs help tech hirers?
Reverting to employer NICs at 13.8%, which could be one way that Burnham makes hiring tech and AI staff cheaper, could boost the capacity of IT contractors’ clients to take them on — and in greater numbers.
Carolyn Walsh, formerly of HMRC and now of Oblako Services Ltd, explained to ContractorUK: “A reversal of employer NICs, should it occur under an Andy Burnham-led Labour government, could provide an indirect stimulus for the solo contractor.
“While the real impact on their own business as a contractor of lowering employer National Insurance is likely to depend on individual circumstances and be potentially small, if lower NICs liability provides larger UK employers with more disposable income to spend on goods and services, a return of financial wiggle room to the supply chain could drive demand for external, contracted tech expertise.”
Joshua Toovey, head of policy and research at the Association of Independent Professionals and the Self-Employed (IPSE), agrees that lowering the ‘tax on jobs’ could provide the fillip that UK IT contracting needs.
“The April 6th 2025 increase in employer NICs from 13.8% to 15% hasn't just hit employees — it's made businesses more cautious about spending on projects and taking contractors on in the first place,” Toovey told ContractorUK.
“Reverting to 13.8% would be a simple, tangible way to inject some confidence back into the labour market, and give businesses the push they need to start investing in tech projects and IT contractors again.”
Bottom line for IT contractors: End-clients have repeatedly blamed their subdued hiring intentions on the employer NICs increase, with more than a third polled by the CIPD in August 2025 (at a time of record hiring lows) saying it had the ‘biggest financial impact,’ but a return to 13.8% employer NIC was omitted from Andy Burnham’s ‘How I’ll help small businesses’ video, uploaded by the prime minister-in-waiting just last week.
What’s the UK tech sector’s overall assessment of prime minister Andy Burnham?
According to TechMarketView’s chief analyst, Georgina O’Toole, two dangers for the tech sector exist from Burnham being asked today by the monarch, King Charles, to form a government.
“For the tech sector, the transition creates two distinct risks”, the IT analyst’s note begins. “The first centres on public sector technology: programme continuity, spending commitments, and the political will to make hard procurement decisions. The second is about the UK's ability to compete, and to make tech a real driver of economic growth, not just a policy aspiration.”
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