AI could save public sector £38bn annually by 2030, new research finds

Published: 28-Nov-2024

New research by Public First, commissioned by Google Cloud, found that AI could save the UK public sector £38bn annually by 2030

Google Cloud, a suite of cloud computing services offered by Google, has published its ‘AI & The Public Sector’ report.

The report was conducted by Public First, a UK-based policy, research, opinion, and strategy consultancy. It reveals the potential of generative AI to provide a once-in-a-generation opportunity to boost productivity, improve working conditions, and enable new innovations across the UK’s public sector.

Building on new modelling and a poll of 415 public administration workers, Public First estimates that greater use of generative AI could significantly offset current pressures in the public sector, creating up to £38 billion a year in annual savings by 2030.

By facilitating more effective working practices and automating repetitive, bureaucratic tasks, generative AI could save enough time to allow for an extra 3.7m GP appointments

This finding builds on a report last year, where we estimated that generative AI tools could create over £400 billion in value across all of the UK economy by 2030, the equivalent to an annual growth rate of 2.6%.

By facilitating more effective working practices and automating repetitive, bureaucratic tasks, generative AI could save enough time to allow for an extra 3.7m GP appointments, a 16% increase in the teacher to student ratio, and freeing up the equivalent of over 160,000 police officers.

Conversely, if the UK cannot leverage generative AI to boost public sector productivity, which has not increased in over 25 years, the Treasury will have to find another £12 billion in revenue for the next fiscal year.

The research highlights that many public administration workers recognise the potential of AI tools but are still early on in the overall process of adoption

Getting this right is particularly important in tackling long-standing pressures on budgets, workloads and waiting times across public services. As it stands, three-fifths of public administration workers (61%) stated that overwork has increased in the last five years. Additionally, 70% say that employee morale has decreased. 

The research highlights that many public administration workers recognise the potential of AI tools but are still early on in the overall process of adoption. Two-thirds of public administration managers agreed that AI will change the way the public sector operates forever – but just 12% said that they had already significantly deployed AI tools.

In order to take full advantage of AI more broadly, the report finds that more will need to be done to overcome current constraints on data, skills and legal guidance:

  • 55% of public administration managers agreed that they would need access to different or better structured datasets to fully take advantage of AI, compared to 16% who disagreed.
  • 60% of public administration managers agreed that there were legal or regulatory barriers that would make them cautious about using AI tools more extensively.
  • Only around a third (34%) of public administration managers were confident that their workforce had the right skills to take advantage of AI.

Technology Secretary, Peter Kyle, said: "These findings are a powerful reminder of how generative AI can be revolutionary for government services. Today we have an opportunity to drive forward public service reform by empowering citizens with the information and tools they need to make better choices and hold services to account.

"Now the digital centre of government, my department is testing how we can put AI to work in the public sector, whether that’s speeding up finding information on GOV.UK or empowering teachers by reducing administrative burdens, allowing them to dedicate more time to what they do best."

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