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ICAEW urges clarity in AI regulatory consultation

Author: ICAEW Insights

Published: 29 Jun 2023

ICAEW’s consultation response supports the UK government’s ambition for flexible AI regulation, but warns clearer guidelines for effective implementation and compliance are needed.

ICAEW’s response to a government consultation on artificial intelligence (AI) regulation has warned that more detailed guidance on how the proposed ideas will be implemented in practice is needed.

The Department for Science, Innovation and Technology (DSIT) launched a consultation in May 2023 to shape the future regulatory framework for AI. The consultation focuses on a policy paper, A pro-innovation approach to AI regulation, published in March this year. It promises a flexible regulatory regime for AI that promotes innovation while minimising potential harms underlined by three main objectives: to drive growth and prosperity; increase public trust in AI; and strengthen the UK’s position as a global leader in AI. 

Although ICAEW’s representation supports the UK government’s AI ambitions, it warns that the government’s proposed strategy doesn’t go into enough detail. This poses challenges for regulators and businesses in understanding the practical implications of its approach, ICAEW warns.

ICAEW’s consultation response also highlights that the proposed regulatory regime differs significantly from the approach adopted in other jurisdictions, such as the EU, where specific requirements are defined. This divergence raises considerations for businesses that develop and market AI products in both the UK and the EU, as they will need to ensure compliance with varying regulatory frameworks.

Esther Mallowah, ICAEW’s Head of Tech Policy, believes there are some helpful ideas in the paper, such as the intention to provide sandboxes where ideas can be tested and adapted to move forward quickly. But a lack of clarity could lead to confusion, she warns. 

“While central functions have been proposed that will address some of the challenges with the multi-regulator approach, such as duplicated/contradictory requirements and skills shortages, details on the composition, resourcing and scope of these functions are not available to assess how effective they will be at solving identified issues,” Mallowah says.

She adds: “This lack of clarity not only means that harms associated with AI may not be adequately addressed as it continues to be developed and used, but it also affects a business’s ability to innovate confidently, particularly when operating across multiple jurisdictions taking fundamentally different approaches to AI regulation.”

ICAEW is calling on the government to address its concerns and provide more detailed guidance to facilitate effective implementation and understanding of the regulatory regime. It says clearer guidelines will help businesses to navigate the regulatory landscape, foster compliance and promote responsible AI innovation.

The government says it has invested more than £2.5bn in AI since 2014, including the creation of a £110m AI Tech Missions Fund and £900m to establish a new AI Research Resource and develop an exascale supercomputer capable of running large AI models. This is backed up by a new £8m AI Global Talent Network and £117m of existing funding to create hundreds of new PhDs for AI researchers.

In a ministerial foreword outlining the government’s proposed approach to AI regulation, the Rt Hon Michelle Donelan MP, then Secretary of State for Science, Innovation and Technology, said: “Better public services, high quality jobs and opportunities to learn the skills that will power our future – these are the priorities that will drive our goal to become a science and technology superpower by 2030.

“Most of us are only now beginning to understand the transformative potential of AI as the technology rapidly improves.” 

Donelan argued that AI is already delivering fantastic social and economic benefits for real people – from improving NHS medical care to making transport safer. “Recent advances in things like generative AI give us a glimpse into the enormous opportunities that await us in the near future if we are prepared to lead the world in the AI sector with our values of transparency, accountability and innovation.”

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