Derby City Council has axed two jobs and saved £200,000 using artificial intelligence (AI) to run its services. The council revealed the cuts in response to a Freedom of Information (FOI) request.
The council has also reduced its number of contractors by introducing automated phone and web chat services called Darcie and Ali. The council says this is part of a plan to make its processes faster and cheaper.
The council’s boss, Paul Simpson, said the job cuts affected only a tiny part of the council’s 3,000 staff. He said AI was not meant to eliminate workers but to make their work more accessible and strategic.
Simpson said contractors and agency staff were only used for extra work, and AI helped the council save money without losing quality.
“We want to use AI to help us deliver services to our customers that cost less and are available 24/7,” Simpson said.
He said AI greatly impacted the council’s services and that the goal was not to slash staff but to boost efficiency.
The council, run by Labour, had previously claimed that no savings came from “forcing staff out”.
The council’s leader, Baggy Shanker, backed the decision, saying the council had to try AI because of the financial pressures on local government.
“The council is just starting to use AI, so, like everyone else, we’re testing it out. No permanent jobs have been lost at the council because of AI,” Shanker said.
“The automated phone and web chat services known as Darcie and Ali have let the council’s staff do more of the outsourced work. This cut the need for external staff and saved money without hitting council jobs.”
But Tory councillor Matthew Holmes warned that AI could lead to more job losses in the future. He said AI could be good for efficient services but also risky.
“The problem is, if it doesn’t work well, residents don’t get the help they need,” he said.
“It removes the human touch, so they may leave the council and lose their jobs.”
The council plans to use more AI in different services, hoping to save £12 million in the next few years. The council’s 2024-25 budget includes nearly £4 million in AI savings.
The council says AI will work with existing operations and make services more accessible. But critics say the commission must be precise and careful about its effects.
Councillor Holmes said relying on AI for savings was risky, as only a few other councils had done it.
