The upcoming UK government has an opportunity to revitalize national finances by leveraging artificial intelligence (AI) to enhance public services, according to two prominent research organizations.
Both the Tony Blair Institute for Global Change and the Institute for Public Policy Research argue that AI has the potential to significantly increase efficiency in frontline services, which are currently strained across various sectors of the public domain.
These assertions come amidst pledges from the Labour Party, leading in polls ahead of the July 4 general election, to utilize technology as a catalyst to reignite economic growth. Labour emphasizes that the UK, with its service-oriented economy, is uniquely positioned to reap the benefits of AI.
However, regardless of the election outcome, the new government will likely confront stringent fiscal constraints due to high debt levels and elevated interest rates exacerbated by the pandemic and subsequent inflation. These factors complicate any promises of substantial budget increases to address the decline in public services observed in recent years.
Nevertheless, proponents of AI argue that its adoption could brighten the economic outlook by boosting growth and enhancing public sector efficiency. Labour has suggested that embracing AI could potentially create up to £70 billion ($89.3 billion) in fiscal headroom within five years, funds that could be redirected towards crucial investments.
Peter Kyle, Labour’s shadow technology secretary, has outlined plans to support the UK’s technology sector, highlighting AI’s potential to stimulate economic expansion. He has previously underscored AI’s capacity to unlock fiscal resources that could fuel long-term investments.
Jeegar Kakkad, director of government innovation at the Tony Blair Institute, emphasized the transformative impact AI could have on public services, particularly citing its applications in the National Health Service (NHS) to address persistent challenges like lengthy waiting lists.
“Even with readily available technologies, we can modernize public services, establish a solid foundation, and prepare for substantial future savings,” Kakkad remarked in an interview with Bloomberg’s UK Politics podcast.
In contrast, Carsten Jung, senior economist at IPPR, adopted a more cautious stance on AI’s transformative speed, stressing that its efficacy would hinge on meticulous implementation strategies.
“In an optimistic scenario, widespread AI adoption could potentially boost GDP across the economy by up to 13%, with substantial gains in the public sector,” Jung noted in an interview with Bloomberg’s UK Politics podcast. “However, achieving such outcomes depends heavily on the approach taken.”
The UK’s public services have struggled with lackluster productivity in recent years, a point critics often attribute to insufficient investment dating back to 2010. Chancellor of the Exchequer Jeremy Hunt has allocated billions in the latest budget to enhance NHS productivity, aiming to reduce record-high waiting lists exacerbated by the pandemic.
A survey conducted by the National Audit Office revealed that 70% of government bodies are currently piloting or planning AI initiatives, despite limited widespread deployment of the technology. The watchdog concluded that AI has the potential to revolutionize public services, delivering significant productivity gains on a large scale.
Source: bloomberg.com
