UK councils turn to AI as budget gaps deepen

UK councils are turning to AI as they try to manage a looming £4bn shortfall, but local government experts warn the technology cannot offset deep financial pressure. A BBC Shared Data Unit study found the 218 upper-tier councils in the UK plan £3.2bn in cuts this financial year. Measures include less frequent bin collections, closures of heritage attractions, bus route cancellations, reduced sheltered housing support and council tax rises of up to 5% at almost every authority.

Dozens of councils have pledged to use AI to drive savings, including Medway Council, which plans to use it to draft care plans and automate invoice processing. West Sussex County Council hopes replacing nine call handlers with an AI contact centre could save £300,000 a year. Campaigners for older people warn that vulnerable residents already struggle with automated systems and need human support when seeking care.

Social work groups are particularly concerned about AI-drafted care assessments, arguing that the technology risks moving from assistance into decision-making. Derby City Council said assessments drafted by AI are always reviewed by a social worker, but the Ada Lovelace Institute found such tools made frequent errors. Experts say projected savings remain marginal, with Liverpool expecting about £150,000 in savings from AI tools by the end of the 2027-28 financial year against a budget gap of more than £29m.