Derby City Council to save £200,000 through job losses due to AI

The council's chief executive Paul Simpson said using AI was "about humans working alongside the technology"

A city council says it will save £200,000 by losing four full-time equivalent agency jobs due to artificial intelligence (AI).

Derby City Council said agency workers in the customer management department were being reduced.

The council's chief executive Paul Simpson said out of a 3,000-person workforce, "it's a very small number".

Conservative councillor Matthew Holmes said he was concerned about more possible future job losses due to AI.

The Labour-run council told the Local Democracy Reporting Service in January that no savings were coming from a "compulsory staffing reduction".

And last week, the governor of the Bank of England said AI would not be a "mass destroyer of jobs".

A freedom of information (FOI) request has found during the 2022-23 financial year, two full-time equivalent positions were lost in the department that deals with customer queries, reports, applications and payments at the council.

Meanwhile, "contractor workload" was decreased in the revenues and benefits department, due to automated telephone and webchat services Darcie and Ali.

The same savings are being made for the current 2023-24 financial year.

Mr Simpson says the city council provides 240 different services, and demand for them is increasing

Mr Simpson said AI had the "potential to revolutionise" the authority's services.

He said: "We are looking to use artificial intelligence to help us deliver services to our customers in a way that reduces the cost and provides 24/7 access to a lot of our services."

Mr Simpson added "from our perspective, there are very, very few job losses" and said using AI was about "streamlining" processes, so the workforce could concentrate on the more complex and strategic activities.

He said contractors and agency staff were not permanent - "they are extra capacity that we bring in to help manage workload".

"By using AI, we can do away without the need for that extra cost," he said.

'Going to change'

In response, Mr Holmes said: "It is a good thing if it works because it will deliver efficient services.

"The bad thing is, if it doesn't work very well, residents don't get the services or support they need. Also, it is taking away the human element... therefore they are out of the authority and have lost their job potentially.

"Jobs are going to change and AI is going to take jobs away from those who are currently carrying them out.

"We need to ensure those people can gain skills to move into another area of the business or work with AI."

Mr Holmes added the council's 2024-25 budget plans nearly £4m of savings through AI.

He said: "We feel it is high risk... to base your budget on something which effectively no-one else has done before."