The business secretary, Greg Clark, said the regulators’ pioneer fund, being awarded to 15 projects, would help regulators “unblock” innovation that might otherwise be hampered by red tape.

Clark said the move would show that Britain had a flexible regulatory environment which could keep pace with technology. “We are building a business environment in which Britain’s dreamers, developers and disruptors can continue to thrive,” he said.

Among the awards is a £700,000 grant for the Solicitors Regulation Authority to support the development of AI (artificial intelligence) legal services for small businesses – dubbed “robolawyers”.

The authority’s chief executive, Paul Philip, said AI services could widen access to legal advice. “Smart use of technology could help tackle the problem that far too many people struggle to access expert legal advice,” he said. “It will help us further build on our work to encourage new ways of delivering legal services, benefiting both the public and small business.”

An award worth £1m will go to the Civil Aviation Authority’s “regulatory lab” to help it develop rules relating to transport innovation, such as for flying taxis.

The CAA policy director, Tim Johnson, said the organisation wanted to facilitate, not block, successful innovation. “We have already seen many global aviation and aerospace innovators choose the UK to develop their new products and services, whether they are traditional operators in the sector or new market entrants,” he said. “With [the fund’s] support we will be able to give some innovators earlier guidance on proposals [and] allow more safe testing of new products and services.”

The Department for Business, Energy and Industrial Strategy has awarded the funding to projects in four “grand challenge” areas – AI, clean growth, the future of mobility, and addressing the ageing society.

Another award is £700,000 to Ofcom for a project that uses blockchain technology (which underpins cryptocurrencies), to improve the management of telephone numbers in the UK. And there is also funding for the Medicines and Healthcare products Regulatory Agency to develop smart AI medical devices for monitoring patients.

Jessica Elgot