Will The UK’s New Prime Minister Sink The UK’s Quantum Industry?

Key Takeaways On The UK Quantum Industry Everything the UK quantum industry has built since 2014 now depends on choices Andy Burnham makes in his first week in office. A single department houses the programmes, the money and the people that hold the UK quantum industry together. • Andy Burnham has asked officials to draw up plans to abolish DSIT, the department that anchors the UK quantum industry’s core support programmes. • The UK quantum industry rests on twelve years of stable policy, from the 2014 National Quantum Technologies Programme to the £2.5 billion National Quantum Strategy. • A rushed departmental merger, a Treasury raid on unspent commitments, or crude regional fragmentation could each set the UK quantum industry back. • Companies such as Riverlane, PsiQuantum and Oxford Ionics show both the strength and the fragility of Britain’s position. • Oxford Ionics, a British startup, has already been sold to America’s IonQ for $1.075 billion, the largest UK quantum exit to date. • Britain has been here before, selling Autonomy, the much maligned AI forerunner, to Hewlett-Packard for around $11 billion in 2011 and DeepMind to Google in 2014. • The fix is cheap, keep a cabinet-level owner for science, reaffirm the ProQure timetable, and leave the Office for Quantum intact. Policy background, the government’s ten-year plan for the UK quantum industry is set out in the National Quantum Strategy. That strategy frames the multi-billion-pound commitments discussed below.

On This Page How Britain built the thing Burnham may now dismantle The climbdown The merger done slowly The Treasury raid Manchesterism applied crudely The compound failure The way through Andy Burnham becomes prime minister on Monday, and before he has appointed a cabinet the technology sector is already fighting him. As first reported by the Guardian, he has asked officials to draw up plans to abolish the Department for Science, Innovation and Technology as part of a wider Whitehall shake-up. The plans have not been signed off, but they are causing significant disquiet among experts inside and outside government, and the backlash lands amid wider Labour unease about Burnham’s early decisions, including the likely appointment of Shabana Mahmood as chancellor. Matt Clifford, who advised the last two prime ministers on AI, called the idea a big mistake, while Dom Hallas of the Startup Coalition warned that a mega business department would leave British tech competing with British steel for attention and waste six months on reorganisation when time is of the essence. Barney Hussey-Yeo, the technology investor, put the counter-mission in a sentence, saying that turning Britain’s scientific capacity into economic power is DSIT’s job and, were he prime minister, would be his idee fixe. For most industries a departmental merger is an inconvenience. For quantum it is a threat to the operating environment itself, and to understand why, you need the history. The UK quantum industry has been built on a decade of public funding. This timeline runs from the 2014 programme to the 2026 ProQure procurement. How Britain built the thing Burnham may now dismantle The UK quantum programme is old by the standards of technology policy.

The National Quantum Technologies Programme began in 2014 with £270 million, anchored by four university-led hubs, before most governments had a quantum policy at all, and the research environment it funded produced the current generation of British quantum companies, among them Riverlane, Oxford Quantum Circuits, ORCA Computing, Phasecraft and Quantum Motion. The programme survived the business department in its BIS incarnation, survived the creation of BEIS in 2016, and moved into DSIT when that department was created on 7 February 2023 from parts of BEIS and DCMS, in the reorganisation that also abolished BEIS. Machinery has changed before and the programme endured, a point worth conceding to the merger’s defenders before examining why this time is different. What changed in 2023 was ambition.

The National Quantum Strategy committed £2.5 billion over ten years and created the Office for Quantum inside DSIT, reporting to the National Science and Technology Council, which the prime minister chairs. The intellectual continuity behind all of this has a name.

Sir Peter Knight, the Imperial College quantum optics pioneer, has shaped the programme since its inception, chairs the National Quantum Technology Programme Strategic Advisory Board and NPL’s Quantum Metrology Institute, and was involved in creating both the strategy and the £2.5 billion commitment itself. A lifelong champion of British photonics, a critical enabling technology across much of the quantum industry from the lasers that run trapped-ion and neutral-atom machines to the photonic qubits built from light, Knight has long argued against cuts or pauses in science funding and their effect on the British economy, and the advisory architecture he chairs is precisely the kind of quiet institutional asset that a departmental demolition scatters. Delivery runs through a web of bodies with different relationships to the department, and the money has kept arriving in layers. An April 2025 package worth £121 million, announced by the then science secretary Peter Kyle, put £46.1 million through Innovate UK for deployment across computing, networking, sensing and navigation, £21.1 million into the National Quantum Computing Centre at Harwell, £10.9 million into NPL’s quantum measurement programme, £23.6 million from EPSRC for the five research hubs, £15.1 million for eleven quantum career fellowships and £4.3 million for apprenticeships. Then came the March 2026 announcement of up to £2 billion, combining more than £1 billion over four years announced by UKRI in December 2025 with the first of its kind ProQure procurement programme, of which £1 billion is directed at procuring large-scale quantum computers, alongside over £500 million for quantum computing applications, £400 million for sensing and navigation, £125 million for networking and £205 million for diagnostics and secure communications. In June, science minister Lord Vallance launched the National Quantum Standards Network with £10 million from DSIT, hosted by NPL and uniting BSI, the NQCC, the National Cyber Security Centre and UKQuantum to anchor UK influence over the international standards that will decide whose hardware the world buys.

Sir Peter Knight, one of the strongest proponents of the UK’s photonics industry, speaking at London Tech Week 2026 The companies this scaffolding supports are at a delicate age. Riverlane has raised more than $120 million including a $75 million Series C, runs its Deltaflow error correction system at Oak Ridge National Laboratory, and is targeting its MegaQuOp milestone of one million error-free quantum operations by the end of 2026, the scale at which error correction lets a quantum computer run useful calculations beyond the reach of any classical supercomputer. It is also supporting OQC under the government’s Quantum Missions Pilot to build what the two companies describe as the UK’s first quantum error corrected testbed integrated with high-performance computing inside a commercial data centre. The government’s own investment agency puts the sector at more than 180 active quantum companies, second only to the United States on both company count and private investment. That figure reflects not just the pure-play quantum firms but Britain’s unusual strength in the enabling supply chain of cryogenics, lasers and photonic components, a density matched nowhere outside America, and it took twelve years of patient, stable policy to accumulate. Britain’s habit of selling its winners The weakness is equally well documented. PsiQuantum may be the purest illustration of the pattern, launched in 2016 by four UK academics who built the company in Silicon Valley rather than Britain, and which has since raised $1 billion at a $7 billion valuation from BlackRock, Nvidia’s venture arm and Temasek while planning data-centre-sized quantum computers in Brisbane and Chicago. Britain’s share of a company its own universities produced is an R&D outpost at Daresbury, part-funded with £9 million of DSIT money. Late-stage British funding rounds lag American ones, which is how Oxford Ionics came to belong to IonQ in a $1.075 billion deal, the largest exit for a UK quantum startup to date, and why Quantinuum, for all its Cambridge roots, is headquartered in the United States. The open question hanging over the next eighteen months is whether Riverlane, Phasecraft and their generation follow the same road, and the answer depends heavily on whether their home government looks committed or distracted. The country has been here before with Autonomy, sold to Hewlett-Packard for around $11 billion in 2011, and with DeepMind, sold to Google in 2014 for a fraction of what it proved to be worth. The backdrop sharpened this spring. In May the US Commerce Department committed just over $2 billion under the CHIPS and Science Act to nine American quantum firms and foundries, taking a minority equity stake in each and framing the programme as national security policy. China’s 15th Five-Year Plan places quantum first among its priority future industries, on top of public investment estimated at $15 billion, the largest of any nation. Both superpowers are consolidating their positions while Britain debates its org chart. THE BEST CASE The climbdown The first and best scenario is that nothing happens. Burnham commissioned options, the options met a wall of opposition inside a day, and prime ministers early in their tenure rarely spend capital on fights they did not need to pick. The plans were never signed off, and some experts say they hope he will change his mind. Monday afternoon settles it. A full secretary of state for science at the cabinet table kills the merger in practice, whatever is said about keeping options open, and the futures of science secretary Liz Kendall and science minister Lord Vallance are the first thing to check on the appointment list. A minister of state reporting to a business secretary keeps the merger alive. In the climbdown world, ProQure proceeds on schedule, the sector exhales, and this episode shrinks to a footnote about a new government testing the fences. THE LIKELY OUTCOME The merger done slowly The likelier bad outcome is a managed integration stretched over a year or more. Science functions move into an enlarged business department, reportedly under the chief whip Jonathan Reynolds, a former business secretary, where the quantum brief becomes one competing priority among many rather than a department’s defining mission. The research money mostly survives because it sits with UKRI rather than the department, and grants keep flowing to the hubs and the NQCC regardless of the Whitehall nameplate. The damage lands elsewhere. The Institute for Government puts the upfront cost of a mid-sized merger at around £15 million, rising to £34 million once early productivity loss is counted and reaching £175 million in the worst historical case, and it finds that engagement scores fell at both BEIS and the FCDO after their mergers. In a piece published this week, the institute warned Burnham directly that reorganisations are always complex, time consuming and expensive, and that reconfigured departments take months at least, often longer, to find their feet. Months of bedding-in is a meaningful fraction of a funding cycle for a Series B company. Procurement decisions slow, the Office for Quantum loses people to the private sector, international partners read the distraction correctly, and no single moment ever announces that anything went wrong. THE FISCAL RISK The Treasury raid The structure can survive while the money does not. Burnham will spend Monday afternoon on cabinet appointments before a series of policy announcements later in the week, likely including a cost of living package covering housing, energy and transport, and packages need paying for. The Institute for Government notes that a crucial budget arrives in the autumn with a spending review to follow in 2027, and new governments with expensive priorities go looking for unspent capital commitments. Most of the £2 billion quantum commitment is announced rather than contracted, and ProQure only began inviting proposals in late March. Nothing gets cancelled in this scenario. The procurement allocation is simply reprofiled across more years at the first fiscal event, the ambition of crowding in private investment collapses because investors discount stretched public money, and companies whose runway was built around procurement revenue in 2027 find the revenue now arrives in 2029. The place to watch is the autumn budget, line by line, and specifically whether the March allocations are restated in full. THE REGIONAL RISK Manchesterism applied crudely Burnham’s governing idea is moving power and money out of London, and there is a version of that instinct which helps quantum. Ben Johnson, a former DSIT adviser, argues that Burnham knows better than almost anyone what backing a local and regional innovation ecosystem can do for inward investment and the research base, and Burnham himself has pledged to back scientists and technologists and make Britain the innovation nation of the next decade. The crude version hurts. The Campaign for Science and Engineering has already cautioned that his drive for greater devolution may affect existing structures for R&D funding, with risks from fragmentation of the system. Quantum works through concentration, because talent pools and cryogenic facilities are subscale when divided twelve ways for political balance, and a funding formula written by map coverage rather than scientific excellence would dilute exactly the density that makes Cambridge and Harwell competitive with anywhere on earth. Run this scenario alongside the merger and you get a danger inside a danger. A merged department decentralising its funding at the same time would leave no single national counterparty at all, so ProQure bidders, foreign governments negotiating quantum partnerships and standards bodies would face a dozen regional conversations in place of one programme with one owner, precisely the fragmentation the procurement reforms were designed to end. The warning sign is language, R&D allocations appearing inside devolution deals, or UKRI criteria acquiring a regional quota. THE WORST CASE The compound failure The scenarios are not mutually exclusive, and the worst outcome is several arriving together. A fast, badly run merger, the departure of Lord Vallance, whose personal credibility has anchored the quantum announcements of the past year, a quiet raid at the same fiscal event, and a government too busy surviving to notice the sector’s response. Capital will not wait for any of it to be confirmed. Investors de-risk on doubt rather than on announcements, quietly repricing UK exposure, slowing term sheets and steering portfolio companies toward American partners while ministers are still insisting nothing has been decided, which means the damage begins the moment uncertainty starts rather than the day a merger is signed. In that world one or two flagship companies accept American offers within eighteen months and plug into an ecosystem where Washington now holds equity in the competition, and the milestones of the national strategy get quietly rewritten at the next refresh. techUK made the underlying point on the day the £2 billion was announced, that lasting advantage will require an investment environment capable of supporting deep-tech companies through long development cycles. Nobody announces the loss of a technology lead. It shows up years later in where the scale-ups list, where the talent goes and whose standards the world adopts. THE FIX The way through Be under no illusion about the pace being set at the front. America is streaming ahead from the top of the field, home to 164 pure-play quantum companies, the most of any nation, commanding 44 percent of global private quantum investment, and now backing nine of its own firms with more than $2 billion of federal money and equity stakes. The only way Burnham makes this work is if he grasps that Britain is on course to lose this race exactly the way it lost the AI race, by inventing the science, nurturing the companies and then watching the value and the control migrate to America while Whitehall was looking elsewhere. DeepMind was the rehearsal. Quantum is the performance, and the curtain is going up during his first year in office. Without support from the UK government, the UK quantum industry will lose its sovereignty over this key technology. There is one more reason to think Burnham may yet land in the right place, which is that the merger contradicts his own emerging strategy. His advisers are reported to be drafting a new AI and technology strategy built around British ownership, tech sovereignty and shifting away from a US-centric approach, and he has separately pushed for more UK-owned data centres with a framework of accountability over foreign ownership. A prime minister who believes in sovereign technology capability has no coherent reason to weaken the machinery holding Britain’s most sovereignty-critical technology sector together, at the very moment Washington is buying equity in the rival ecosystem. If sovereignty is the destination, a stable quantum department is the road. The fix costs Burnham almost nothing. Keep a cabinet-level owner for science whatever the departmental branding, reaffirm the ProQure timetable inside a fortnight, and leave the Office for Quantum, the standards network and the council reporting line untouched by whatever wider reform proceeds. The tech sector has already handed him an agenda, an open letter called Rebuild Britain signed by more than 100 founders and investors, a list reported to have grown past 260, asking for pension capital to be unlocked for scale-ups, regulatory reform and real procurement spend behind British tech. Unlocking pension money for scale-ups would attack the late-stage funding weakness at its root without demolishing a single department. Burnham makes his most significant cabinet appointments on Monday afternoon, and whether continuity wins will be visible by the evening. This publication will be reading the appointment list with the same attention as the companies whose next funding rounds depend on it. Stay currentSee today’s quantum computing news on Quantum Zeitgeist for the latest breakthroughs in qubits, hardware, algorithms, and industry deals. Tags: