Blog- Friday, 11th July 2025, Capsticks, Corporate Partner

Procurement in AI – Analysis of Ada Lovelace Institute’s ‘Buying AI’ report

The Ada Lovelace Institute has published a report https://www.adalovelaceinstitute.org/wp-content/uploads/2024/09/Ada-Lovelace-Institute-Buying-AI.pdf warning that local authorities need more support to responsibly procure artificial intelligence (AI) systems, as existing government guidance does not provide a clear or comprehensive account of how to procure AI in the public interest. This is unlikely to be ‘news’ to those working in local authorities, who face pressure to use AI technologies to enhance productivity and decrease running costs, with little clear guidance on which AI technologies to use or how to implement them.

Analysis

Through reviewing 16 pieces of guidance, legislation and policy documents relating to the procurement of AI, the Institute found that there is a significant burden on local government to navigate and interpret different parts of the various pieces of guidance and legislation, and to understand their obligations in respect of themes like transparency, fairness and public benefit, which are inconsistently defined and often vague in their application.

The Institute also noted that procurement negotiations between local governments and private AI companies are often taking place in the context of an imbalance of expertise and resources. Furthermore, local government organisations are subject to higher levels of scrutiny and accountability than the private sector, particularly in areas such as legitimacy, trust, fairness and equality. Therefore, require higher levels of transparency, explainability and are subject to potentially greater consequences if things go wrong.

Practical Steps

This paper provides practical steps for improving the procurement of AI and data-driven systems in local government.

These include:

· Reviewing and streamlining Government guidance on the procurement of AI and data-driven systems.

· Gaining consensus on definitions, leveraging existing data ethics frameworks and government AI regulatory principles to clarify and consolidate relevant terminology. Improving governance, including the planned rollout of the Algorithmic Transparency Recording Standard and implementing the Government’s AI regulatory principles.

· Piloting an Algorithmic Impact Assessment Standard for local government to use when procuring AI and data-driven systems.

· Setting out metrics for success at the procurement stage, so that technologies can be assessed against post deployment.

· Clarifying when and how to engage with the public and experts in this process.

· Supporting local government to up-skill teams to ensure effective AI use and auditing.

· Enabling transparency mechanisms so local government teams and suppliers have clarity and coherence on what transparency means for them, and procurers are equipped to engage with suppliers.

· Defining responsibilities across the AI procurement process, including between public- and private-sector actors.

Recommendations

The report emphasises the need for a public-centred approach that prioritises the benefits to the community while mitigating potential risks and harms.

The key points include:

· Transparency and Accountability: It is crucial for local government organisations to ensure transparency in AI procurement processes and to establish clear lines of accountability for AI deployments.

· Ethical Considerations: Local government must consider ethical implications, such as biases in AI algorithms, to ensure fair and equitable outcomes for all citizens.

· Public Engagement: The article advocates for involving the public in decision-making processes related to AI, fostering trust and ensuring that AI solutions address community needs and concerns. Public law concepts of fairness and engagement are also relevant here.

· Regulatory Frameworks: The need for robust regulatory frameworks to guide AI procurement and implementation, ensuring compliance with legal standards and protecting citizens' rights, is highlighted.

How Capsticks can help

We have extensive knowledge of procurement law in AI in the public sector, our specialist team are always on hand to support you with all aspects of the procurement process. We can review and/or produce key policies surrounding the use of AI.

If you have any queries around what's discussed in this insight or are thinking of procuring AI tools and would like some advice more generally, please speak to Tana Dryden-Strong to find out more about how Capsticks can help.