AI could unlock £8 billion in annual savings for Local Authorities, says new report

A report by the Tony Blair Institute for Global Change (TBI) suggests that integrating AI into local government operations could yield annual productivity gains of up to £8 billion across England and Wales. This equates to approximately £325 per household, highlighting AI's potential to enhance public service efficiency and reduce costs.

The report, titled Governing in the Age of AI: Reimagining Local Government, emphasises the transformative impact of AI on local governance. By automating routine tasks, AI can alleviate administrative burdens, allowing staff to focus more on direct community engagement and service delivery.

Key Findings:

• Task Automation Potential: An analysis conducted in partnership with a local council revealed that 26% of staff tasks could be automated or enhanced using AI. This would save approximately one million work hours annually for that council alone. Extrapolated nationally, this suggests significant time and cost savings across local governments.

• Service Backlog Reduction: AI tools can expedite processes such as planning applications and social care assessments, addressing existing backlogs and improving service delivery times.

• Enhanced Decision-Making: By providing data-driven insights, AI can support more informed policymaking and resource allocation at the local level.

Recommendations

The report argues for the establishment of a 'Devolved AI Service' - a collaborative platform designed to equip councils with AI tools tailored to their specific needs. This initiative aims to foster a 'by-councils, for-councils' approach, promoting shared learning and resource optimisation.

Alexander Iosad, Director of Government Innovation Policy at TBI, stated, "Local government has shown in the past how it can be an engine of change but is at risk of sputtering. To keep it moving forward, it's critical that they seize this moment."

For those in DDaT roles within the Civil Service, this report underscores the importance of integrating AI into local government strategies. It highlights the need for:

• Strategic Planning: Developing clear frameworks for AI adoption that align with service delivery goals.

• Capacity Building: Investing in training and resources to equip staff with the skills necessary to implement and manage AI solutions effectively.

• Ethical Considerations: Ensuring that AI deployment adheres to ethical standards, particularly concerning data privacy and algorithmic transparency.

By embracing AI, local governments can enhance operational efficiency, improve citizen services, and achieve significant cost savings. However, realising these benefits requires concerted effort, strategic investment, and a commitment to ethical implementation.

For a comprehensive understanding of the report and its implications, you can access the full document here: Governing in the Age of AI: Reimagining Local Government.