At 8am this morning the Government confirmed it is still planning to build an online CTO as a service for UK SMEs. For those of us who have been the CTO as a service for two decades, this is fascinating news.
The SME Digital Adoption Taskforce was set up in April 2024. It published 10 recommendations. The government accepted all 10 in July 2025. In June 2026, the Department for Business and Trade published its progress update. And there, sitting quietly at number 3, was a plan to give small businesses AI-powered technical guidance at national scale.
The recommendation reads: develop a scalable online Chief Technical Officer as a service, providing AI-powered guidance and support to SMEs.
That sentence deserves more attention than it got.
Why the Government is Building This
Let me be clear about something first. I do not think this is a bad idea. In fact, it validates something I have said for years: the single biggest technology bottleneck in most SMEs is not tools. It is access to technical judgement.
Think about who advises a typical 20-person manufacturer on software decisions. Maybe an IT support company that sells hardware. Maybe a nephew who is “good with computers”. Maybe nobody, in which case decisions get made by whoever shouts loudest at the board meeting.
The taskforce understands the problem. The barriers it identified are capability, cost and awareness. Small businesses do not know what to adopt. They cannot afford independent advice. They do not even know the options exist.
An AI-powered CTO service could genuinely move that needle at the awareness and confidence end. If a food producer can ask “what software should I use to track batch compliance” and get a competent answer for free, that is better than the nothing they were getting before.
And there is real money in this pipeline now. The update confirms the AI Upskilling Fund from the Department for Science, Innovation and Technology. Place-based pilots in Leeds have already supported 806 businesses. The West of England recruitment trial received 223 applications. The Business Growth Service is live as the central entry point, with a Business Academy digital skills series available on demand.
I do not want to talk that down. Free, honest, at-scale guidance is a good thing. British businesses have been making do without it.
The Catch: Advice is Not the Same as Judgement
Now for the part where 27 years of doing this job makes me a bit more sceptical.
A CTO is not primarily an advice service. Advice is the easy 20 per cent. The hard 80 per cent is judgement, and judgement is contextual in ways an online service will struggle with for years.
Here is a scenario I meet constantly. A company has an ERP system from 2011. It is creaking. The vendor is pushing an expensive migration. Two teams have built shadow spreadsheets around its worst features. The finance director wants the problem gone before year end. And nobody has documented why the last attempted replacement failed in 2019.
Tell me what question that company types into an online CTO.
The honest answer is that they cannot. Not because they are not smart. Because the problem is not a knowledge gap. It is a context gap. The information needed to answer the question lives in the heads of people who are busy doing their jobs, and half of it is political rather than technical.
An AI service can tell you what an ERP is. It can list popular vendors. It might even give you a sensible question checklist. What it cannot do is sit in your warehouse for a day, notice that the goods-in process and the stock system disagree, and tell you which of those two things is actually true. That last bit is the job.
Three Things That Are Coming and Worth Using
That said, I would encourage SMEs to watch three parts of this pipeline closely, because some of it will be genuinely useful.
The Business Growth Service. This is live now. If you have never had access to technical advice, start here. It is free, it signposts to Growth Hub advisors who understand your region, and it collates schemes like Made Smarter and Help to Grow in one place. For a five-person business that has never done this before, that is a real improvement over nothing.
The e-invoicing roadmap. E-invoicing becomes mandatory in the UK from April 2029, with an implementation roadmap due in the 2026 Budget. If you run an SME and you do not know whether your accounting software can send and receive structured invoices, put that on a list now. This is exactly the kind of quiet infrastructure change that catches small businesses out, because the big suppliers prepare years in advance and everyone else gets a scramble.
The systems integration call for evidence. This one made me sit up. Between March and June 2026, government ran a strategic call for evidence on systems integration. When a government starts asking why software systems do not talk to each other, it usually means someone finally noticed how much of the productivity problem is plumbing rather than tools. I have written before that AI pilots stall on integration, not intelligence. It seems the message is landing.
The Trap to Avoid
Here is my worry, and it is the same worry I have about every wave of AI adoption advice.
There is a pattern that repeats when cheap advice becomes available: businesses use it to defer the expensive decision rather than to make it.
You see this with every self-service tool. The free tier becomes a place where problems go to be discussed rather than solved. The business gets the psychological comfort of activity, a document full of options, a plan of sorts, and nothing changes. Six months later, the creaking ERP is still creaking and now it is also 6 months closer to failing.
The taskforce’s own ambition is for UK SMEs to be “the most digitally capable and AI confident in the G7” by 2035. Nine years. The businesses that will get there are not the ones who read the most guidance. They are the ones who take one decision at a time and actually execute it.
A Practical View from the Cheap Seats
So how should a small business use all this? Here is my honest take as someone who does this job every day.
Use the free stuff first. The BGS, the Business Academy videos, the Growth Hub advisors. It costs you an afternoon and it will make you a better buyer. If you have never had technical advice, this will genuinely raise your floor.
Use an online CTO for breadth. When you need to know what options exist, what terms mean, what questions to ask. It will be good at that, and the price is unbeatable.
But when the decision is expensive, when it touches your core operations, when getting it wrong costs you a year or six figures, bring in a human who has done it before. Not because humans are smarter than AI. Because at this stage of the technology, judgement under context is still a human service, and the cost of being wrong is not evenly distributed. An AI service can be wrong 10 per cent of the time and be a good deal at free. Your business cannot be wrong 10 per cent of the time on an ERP replacement.
The Uncomfortable Truth
There is also an awkward commercial angle nobody in government will say out loud.
The businesses best placed to exploit all this support are the ones who already have someone technical on the board or on speed dial. They will extract the value in a week. The businesses the taskforce most wants to reach, the ones with no technical voice at all, will still need someone to hold their hand through acting on the advice.
Advice changes nothing on its own. I have watched brilliant reports gather dust in desks across the country. What changes things is advice plus someone accountable for the doing.
That gap is where fractional CTOs, technical consultancies and, yes, AI-literate developers earn their keep. The government is about to make the knowledge layer free. The execution layer is still a job. If anything, free advice raises the value of execution, because it gives more businesses the confidence to start projects they then need help finishing.
What I Would Tell My Own Clients
If you run a UK SME and you are reading about all this new support, here is my simple decision rule.
If a technology decision is reversible and cheap, use the free advice and make the call yourself. You will learn from it either way.
If a decision is expensive, slow to reverse, or sits at the centre of how you operate, treat free advice as a starting brief, not a plan. Spend a little money on real technical judgement before you commit. It will cost you a fraction of the mistake.
And start now rather than waiting for the perfect programme to launch. The taskforce ambition runs to 2035. Your competitors are not waiting nine years, and neither should you.