Derby City Council have announced cost savings of £200,000 alongside job reductions
A recent Freedom of Information (FOI) request disclosed that two full-time equivalent positions were eliminated in the customer management department during the 2022-23 financial year.
Additionally, reductions in contractor workload have been achieved in the revenues and benefits department through the implementation of automated telephone and webchat services named Darcie and Ali.
The council says the move is part of a broader strategy to streamline processes and enhance efficiency in service delivery.
According to the council's chief executive, Paul Simpson, the reduction of agency workers represents a small fraction of the council's overall workforce, which stands at 3,000 employees. He stressed that AI implementation is not intended for massive job cuts but rather to optimise operations and allow the workforce to focus on more complex and strategic tasks.
Mr Simpson said that contractors and agency staff are brought in as additional capacity, and that AI technologies enable the council to reduce costs without compromising service quality.
"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," Simpson said.
He highlighted the transformative impact of AI on the authority's services and underlined that the aim is not to make extensive staff reductions but to improve efficiency.
The council, led by the Labour party, previously asserted that no savings were derived from "compulsory staffing reduction."
Baggy Shanker, leader of Derby City Council, defended the decision, highlighting the need to explore AI's potential amid ongoing financial challenges in the local government sector.
"The council is at an early stage of using AI so, like all organisations, we're exploring its possibilities. No permanent jobs have been lost at the council to date because of AI," Shanker said.
"The introduction of the automated telephone and webchat services known as Darcie and Ali has allowed the council's permanent workforce to carry out more of the work that was previously outsourced. This reduction in the need to use external staff has delivered a cost saving without affecting existing council jobs."
Despite those assertions, concerns were raised by Conservative councillor Matthew Holmes about potential future job losses due to AI implementation. Holmes acknowledged the potential benefits of AI for delivering efficient services but cautioned about the risks.
"The bad thing is, if it doesn't work very well, residents don't get the services or support they need," he stated.
"Also, it is taking away the human element... therefore they are out of the authority and have lost their job potentially."
Looking ahead, Derby City Council plans to expand its use of AI technology across various services, with ambitions to realise substantial savings totalling £12 million in the coming years. The council's 2024-25 budget plans include nearly £4 million in savings attributed to AI implementation.
While the council asserts that AI will complement existing operations and improve service accessibility, ongoing scrutiny underscores the need for transparency and careful consideration of the technology's implications.
Councillor Holmes expressed reservations about the high-risk nature of relying on AI for budgetary savings, noting that such a strategy hasn't been widely adopted elsewhere.