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Derby City Council extends AI project with multi-million deal after saving £200,000 with chatbots

Following on from the success of its initial pilot project using artificial intelligence, Derby City Council claims to have found 54 other ways the technology can save it money

Derby City Council has signed a £7m contract to extend the use of artificial intelligence (AI) copilot technology across more of its services, after the roll-out of AI assistants saved it £200,000.

The four-year deal with ICS.AI will see the expansion of generative AI (GenAI) use into adult social care, customer services and debt recovery, and will be underpinned by the deployment of the company’s Smart Copilot GenAI platform.

“We are looking to transform our services against a background of increasing demand and financial challenges, a situation which affects councils across the country,” said Paul Simpson, chief executive of Derby City Council. “Dealing with this by making cuts to services year on year is not sustainable.

“We want to make sure our services meet the needs of our citizens by becoming more dynamic and efficient, and increased use of AI is one of the ways we’ve identified as a means of achieving this,” he told Computer Weekly.

The council said that during the first phase of the project, teams working in adult social care will use AI to review care packages and help them decide if someone who needs support living at home is receiving the right level of care.

They will also use AI to answer more simple and straightforward enquiries from the public and other professionals, so staff can focus on dealing with queries that need their expertise.

“By using AI to take on routine tasks, they will be enhancing their own skills and freeing up more time to concentrate on the activities and tasks that provide real value to those most in need of support,” the council said. “They will also use AI software to quickly generate information and help them make informed decisions.”

AI assistants

The council has already been working with ICS.AI on two AI assistants: Darcie for the council’s customer service centre, and Ali for Derby Homes housing enquiries. These digital assistants will be upgraded and expanded, and the council will also use AI to answer emails quickly, or flag them with colleagues to deal with.

The council will also use AI to support debt recovery by allowing it to gather and analyse information from across all of its systems in a more timely manner than staff can currently achieve.

With this AI assistance, the council will be able to identify where it needs to offer support to minimise debt, and maximise income collection, it said.

The first phase is expected to be in place in four months, with plans to roll out phases two and three across other services once it is running successfully. The priority then will be widening its adoption further, the council said, before adding that a human would always be involved when it came to decision-making.

The new contract with ICS.AI is expected to generate £3.925m in savings during the 2024/25 financial year, and this figure is expected to rise to a minimum of £12.25m annually once the project is fully delivered.

Simpson said after seeing the potential to use GenAI across the wider council with Darcie and Ali, it commissioned ICS.AI to conduct a number of discovery workshops, which helped to find more specific business cases where AI could help enhance efficiency, reduce operational costs and deliver cumulative cost savings.

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In all, 261 AI opportunities were identified at the discovery workshops, of which 54 AI offerings have now been proposed to deliver significant savings. The plan to deliver the AI transformation programme is 18 months, split across the three phases.

Darcie and Ali have already proved to be a success for the council.

While inbound phone calls account for more than 60% of residents’ contact with the council, most of those calls ask similar questions or are requests about a small number of services. Many calls often have a straightforward answer.

The council has already handled over half a million telephone and web queries with these assistants, resolving 43% of enquiries without input from staff – double the initial target for the project – and saving the council £200,000. More than 4,000 of these queries were handled outside of normal hours.

Previously, the phone system used a recorded message that gave callers a list of numbered options.

The AI assistants introduced in April last year instead try to understand the query, and if there is an online answer, it’s able to send it in a text, or otherwise redirect the call to one of 40 different departments.

However, these copilots will not be the only option for people who want to contact the council, as people will always be able to speak to a member of staff, or see someone face-to-face, during business hours if they prefer.

Reducing demand on operators

Simpson said that as well as the cost savings, the digital assistants have reduced demand on human operators, releasing time for them to spend with residents with more complex needs. Meanwhile, the intelligence the council gets from the digital assistants, which it did not have access to before, has helped it change and adjust the services it’s providing for citizens.

The council is still developing the digital assistants based on customer feedback. For example, where people have had a less-than-positive experience with using the AI, it has found that sometimes the questions asked are too complex for the AI to deal with, and needed a human instead. He said it’s important for the council to continue to get the message across about what the assistant is designed to do. 

“We are one of the first in the local government sector to begin this journey, so are pioneering, finding the way and dealing with the emerging challenges,” said Simpson. “However, the upside is that we will see the benefits before anyone else, and be able to share that learning with the sector.”

He said the overall reaction from the public so far has been like a microcosm of the wider debate around the use of AI. “There is interest in its potential, but also cautiousness about the unknown, which is understandable,” said Simpson.

“For us as a council, use of generative AI presents huge opportunities at a time when the government is calling on the public sector to increase productivity, and local authorities continue to face financial challenges. We are however aware of the risks and will work to mitigate these. It’s vital that we bring our customers and colleagues on this journey with us.”

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