More than a third (34%) of UK IT service providers say regulatory approvals delay ‘almost every’ technology project – with nearly one-in-five experiencing average delays of more than three months. This is according to new research from Telehouse Europe, a global data centre service provider.
The slowdown comes despite strong support for the UK’s approach to tech regulation. Two-thirds (67%) of service providers say current data protection rules are accelerating their ability to launch new digital services – including 32% who see the rules as a major accelerator. A similar proportion say the UK’s AI framework supports innovation, reflecting broad confidence in the country’s principles-led model.
However, uncertainty over how regulation is applied in practice is beginning to undermine that confidence. More than a third (37%) of service providers cite a lack of consistent international rules as one of their biggest operational concerns.
The impact is now extending beyond delivery timelines. Over half (51%) of service providers say they have already cut or offshored technology roles, or plan to do so within the next 12 months, due to the cost and complexity of managing AI regulation. While these steps help manage budgets, they also risk stretching teams and slowing execution further.
Despite these pressures, confidence in compliance remains high. More than 99% of service providers believe they can meet regulatory requirements while continuing to innovate, highlighting a widening gap between confidence in governance and the reality of navigating approvals at pace.
Mark Pestridge, Executive Vice President and General Manager, Telehouse Europe, said: “Strong regulation and robust approvals are essential to building trust in AI and digital services, and there is clear support across the sector for maintaining high standards.”
“The opportunity now is to improve communication and clarity around approval processes.”, Pestridge added. “Better dialogue between regulators and service providers would help reduce uncertainty, shorten timelines and allow well-governed projects to move forward without unnecessary delay.”
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