UK government's £45B AI savings pitch built on broad-brush guesswork, MPs told
(2025/10/15)
- Reference: 1760516105
- News link: https://www.theregister.co.uk/2025/10/15/uk_gov_ai_savings/
- Source link:
UK government's plans to save £45 billion through the application of AI in the public sector lack clarity and are based on broad-brush assumptions, Members of Parliament have heard.
Speaking to the House of Commons Science, Innovation and Technology Committee, Nick Davies, programme director at the Institute for Government, said the figure was a "huge amount, given that most of what government is spending on is either salaries or is on different kinds of infrastructure."
In January, [1]a report from the Labour government claimed that publicly funded services including the NHS, local councils, and central government are missing out on a potential £45 billion ($55 billion) in productivity savings through old or poor use of technology.
[2]
In June, the Department for Science, Innovation and Technology (DSIT) [3]published a study claiming AI could save the equivalent of nearly two working weeks per person per year. The study "comes as expansive research shows half of office work can be helped by AI, as government continues its push to save £45 billion by creating a lean, modern state using tech."
[4]
[5]
Davies told MPs that making actual savings – or reducing spending – by that level would mean drastic changes. "Unless you have serious plans to make pretty meaningful headcount reductions or reduce capital expenditure, it's going to be very difficult to achieve that £45 billion," he said.
[6]Former UK prime minister Sunak becomes human Clippy for Microsoft, Anthropic
[7]Irony alert: UK.gov Work dept hires IBM to aid AI projects
[8]Britain jumps into bed with Palantir in £1.5B defense pact
[9]UK drafts AI to help Joe Public decipher its own baffling bureaucracy
"If you're talking about productivity improvements – improvements of service of the value of £45 billion – that could be delivered with existing spending. I think that is more achievable. There is certainly kind of inefficiency, duplicative spending across the public sector that you could spend more effectively so but without knowing more about where that £45 billion comes from, it's harder to say."
When [10]questioned by the Parliamentary committee , [11]DSIT said the figure was calculated on the assumption that "100 percent of routine tasks and 10 percent of non-routine tasks can be automated."
Davies said: "I don't know what a routine task is. I don't know if the government knows what a routine task is either. Clearly, there are some potential big, long-term benefits that could be delivered by technology. My fear is that a lot of the AI tools are pretty early stage. They haven't been scaled up and often dependent on having high quality data and data architecture, which in many cases we don't have."
[12]
A Copilot trial by the Department of Trade and Business late last year, published in the summer, revealed [13]no discernible gain in productivity from using the tool. And Microsoft admits it is still trying to [14]convince customers of the return on investment . ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2025/01/21/ai_humphrey_uk_government/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.gov.uk/government/news/landmark-government-trial-shows-ai-could-save-civil-servants-nearly-2-weeks-a-year
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/10/10/former_uk_prime_minister_rishi/
[7] https://www.theregister.com/2025/10/02/uk_pensions_and_benefits_department/
[8] https://www.theregister.com/2025/09/20/uk_palantir_defense_pact/
[9] https://www.theregister.com/2025/08/18/ai_form_fillers/
[10] https://committees.parliament.uk/committee/135/science-innovation-and-technology-committee/news/206535/government-shares-calculation-for-45-billion-annual-savings-from-digitisation-of-public-sector/
[11] https://committees.parliament.uk/publications/47602/documents/248450/default/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2025/09/04/m365_copilot_uk_government/
[14] https://www.theregister.com/2025/09/17/return_on_investment_for_copilot/
[15] https://whitepapers.theregister.com/
Speaking to the House of Commons Science, Innovation and Technology Committee, Nick Davies, programme director at the Institute for Government, said the figure was a "huge amount, given that most of what government is spending on is either salaries or is on different kinds of infrastructure."
In January, [1]a report from the Labour government claimed that publicly funded services including the NHS, local councils, and central government are missing out on a potential £45 billion ($55 billion) in productivity savings through old or poor use of technology.
[2]
In June, the Department for Science, Innovation and Technology (DSIT) [3]published a study claiming AI could save the equivalent of nearly two working weeks per person per year. The study "comes as expansive research shows half of office work can be helped by AI, as government continues its push to save £45 billion by creating a lean, modern state using tech."
[4]
[5]
Davies told MPs that making actual savings – or reducing spending – by that level would mean drastic changes. "Unless you have serious plans to make pretty meaningful headcount reductions or reduce capital expenditure, it's going to be very difficult to achieve that £45 billion," he said.
[6]Former UK prime minister Sunak becomes human Clippy for Microsoft, Anthropic
[7]Irony alert: UK.gov Work dept hires IBM to aid AI projects
[8]Britain jumps into bed with Palantir in £1.5B defense pact
[9]UK drafts AI to help Joe Public decipher its own baffling bureaucracy
"If you're talking about productivity improvements – improvements of service of the value of £45 billion – that could be delivered with existing spending. I think that is more achievable. There is certainly kind of inefficiency, duplicative spending across the public sector that you could spend more effectively so but without knowing more about where that £45 billion comes from, it's harder to say."
When [10]questioned by the Parliamentary committee , [11]DSIT said the figure was calculated on the assumption that "100 percent of routine tasks and 10 percent of non-routine tasks can be automated."
Davies said: "I don't know what a routine task is. I don't know if the government knows what a routine task is either. Clearly, there are some potential big, long-term benefits that could be delivered by technology. My fear is that a lot of the AI tools are pretty early stage. They haven't been scaled up and often dependent on having high quality data and data architecture, which in many cases we don't have."
[12]
A Copilot trial by the Department of Trade and Business late last year, published in the summer, revealed [13]no discernible gain in productivity from using the tool. And Microsoft admits it is still trying to [14]convince customers of the return on investment . ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2025/01/21/ai_humphrey_uk_government/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.gov.uk/government/news/landmark-government-trial-shows-ai-could-save-civil-servants-nearly-2-weeks-a-year
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/10/10/former_uk_prime_minister_rishi/
[7] https://www.theregister.com/2025/10/02/uk_pensions_and_benefits_department/
[8] https://www.theregister.com/2025/09/20/uk_palantir_defense_pact/
[9] https://www.theregister.com/2025/08/18/ai_form_fillers/
[10] https://committees.parliament.uk/committee/135/science-innovation-and-technology-committee/news/206535/government-shares-calculation-for-45-billion-annual-savings-from-digitisation-of-public-sector/
[11] https://committees.parliament.uk/publications/47602/documents/248450/default/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/publicsector&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aO9wt6RtkfzOahuML6tdAgAAABg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2025/09/04/m365_copilot_uk_government/
[14] https://www.theregister.com/2025/09/17/return_on_investment_for_copilot/
[15] https://whitepapers.theregister.com/
Re: So, business as usual:
ParlezVousFranglais
After first spending 50% more on management consultants, lawyers, expensive AI platforms and half-baked training, and then introducing a whole new raft of productivity KPI's thereby spawning a whole new internal civil service industry of "AI productivity advisers"
AI
UCAP
A perfect solution for all of those problems that don't actually exist.
Re: AI
Flocke Kroes
AI has solved some problems very effectively:
Better at raising Nvidia's share price than cryptoscams.
Getting lazy lawyers into trouble.
Bulk generating fake reviews.
assumptions
Anonymous Coward
"100 percent of routine tasks and 10 percent of non-routine tasks can be automated."
I guess that's what got Brum City council into trouble.
It's becoming increasingly clear that AI is the latest Management Consultant excuse for sacking people.
"a lean, modern state using tech."
That's code for the end of a state which regards its citizens as anything more than economic units - the sort of dystopia of Brazil or The Humanity Bureau. Be careful what you vote for.
Oh and
ajadedcynicaloldfart
it's maths NOT math. Maths being short for mathematics and all that
Ishy
So, business as usual:
We've plucked a number out of our arse, and that's how much we can save!