In a new internal report, Cheshire East Council says it could save as much as £60 million over the next five years by leveraging artificial intelligence (AI).
Smart Technology Shift
The report highlights how AI could transform everything from customer service to social care, while tackling the authority’s ongoing financial struggles. The plan is part of a broader shift across UK councils to use smart technology to plug budget gaps, improve services, and cut red tape.
Why AI And Why Now?
Cheshire East, like many other UK local authorities, is under serious financial pressure. Its leaders have already warned of an eye-watering £25.3 million funding gap for the 2025–26 financial year. To help cover its day-to-day spending, the council has now secured exceptional financial support from central government for the second year running – essentially permission to borrow to stay afloat.
It seems, therefore, that against this challenging backdrop, the idea of using AI to deliver better services for less money is fast becoming not just an idea, but a necessity.
The council’s internal report, which is due to be discussed by the corporate policy committee, outlines a bold “transformation plan”. It suggests that artificial intelligence could be used across several departments to make services faster, more accurate and far less reliant on overstretched staff.
Where AI Could Make The Biggest Difference
The report identifies three key areas where AI could deliver the biggest impact: customer service, adult social care and children’s services. For example:
– Customer contact centres. The council wants to reduce the number of calls handled by humans by introducing AI-powered virtual assistants and chatbots. These tools can handle routine queries and direct people to the right services automatically, thereby cutting wait times and staffing costs.
– Adult Social Care. AI could streamline assessments and care planning, especially for complex cases. Tools could help staff identify needs earlier, coordinate support more efficiently and reduce duplication of work, thereby freeing up social workers to focus on people rather than paperwork.
– Children’s Services. The council thinks that AI might also help with tasks like processing Education, Health and Care Plans (EHCPs) more quickly. The report suggests this could reduce waiting times for families and cut costs by finding more suitable (and often less expensive) placements for children earlier in the process.
In total, the report suggests that the estimated savings from using AI could range between £40 million and £60 million over a five-year period. The report also highlights how, after that, annual savings of up to £14 million could continue. As the report says, “These benefits will be realised through improved service delivery, reduced costs, and enhanced operational efficiency”.
Not The Only Council Using AI
Cheshire East isn’t the only authority turning to AI to help solve deep-rooted challenges. Across the UK, other councils are trialling a wide range of AI-driven tools and platforms, with some already reporting significant savings and improved outcomes. Some examples include:
– London Borough of Sutton is using smart sensors on everyday appliances (like fridges and kettles) to help monitor elderly residents living independently. If someone doesn’t make a cup of tea in the morning or open the fridge, carers get an alert. It’s a simple but effective way to spot problems early and avoid emergency call-outs.
– Blackpool Council has started using AI-equipped vehicles to detect potholes before they become serious hazards. The technology can map the condition of roads in real-time, allowing for proactive maintenance and fewer costly insurance claims.
– Coventry City Council, working with energy provider E.ON, has launched a 15-year smart energy partnership. AI-enabled drones carry out thermal imaging surveys to detect where heat is escaping from homes – allowing residents to insulate more effectively and cut energy bills.
– Dorset Council is piloting AI-driven acoustic monitoring in care homes. These devices alert staff to unusual noises at night, helping them check on residents without disturbing them unnecessarily. It’s already led to faster response times and better care planning.
Government Is Backing The Shift
The UK government is actively encouraging councils and other public bodies to adopt AI. As part of its wider “Plan for Change”, ministers want to see up to £45 billion in efficiency savings across public services, with AI being central to that goal.
One example is the introduction of tools like “Humphrey”, an AI assistant developed to support civil servants with admin tasks such as summarising documents and generating reports.
In health and social care, the Department of Health and Social Care is also investing in AI pilots through the Digitising Social Care Programme. These trials, including those in Dorset, are seen as a way to test what works and scale it up quickly.
What Are The Risks?
Despite the promise of AI, it’s not without controversy. For example, there are concerns about how personal data will be used (privacy), especially in sensitive areas like social care and children’s services. Councils must, therefore, tread carefully to ensure they comply with data protection laws and maintain public trust.
There’s also the issue of accuracy. AI systems are only as good as the data they’re trained on. If the data is incomplete or biased (or there are ‘AI hallucinations’ – AI making things up), the outcomes can be misleading, with potentially serious consequences when it comes to making decisions about vulnerable people.
There’s also the question of AI’s impact on jobs. For example, if AI can automate many routine tasks, it may lead to reduced staffing levels in some departments. That could mean job losses, or at the very least, significant changes to how council employees work.
That said, many people in UK local authorities are aware that AI is just one tool that can help and is not the answer to all the problems they face. For example, as one local government technology expert put it: “AI is not a silver bullet. It has the potential to support better services and reduce costs – but only if it’s implemented carefully, with real oversight and a focus on outcomes.”
What Does This Mean For Your Business?
While the promise of AI-driven efficiency might once have felt like a distant ambition, it seems it’s now becoming a practical solution to the very real financial strain facing councils across the UK. However, Cheshire East’s plan to wholeheartedly embrace AI isn’t just a tech upgrade but is more of a survival strategy. By rethinking how services are delivered and where time and money are being lost, the council is hoping to modernise its operations in ways that could have lasting benefits for both staff and residents.
For UK businesses, especially those operating in the tech and digital services sectors, councils embracing AI could mean new business opportunities. For example, as councils look to adopt AI, they will need software developers, data analysts, compliance consultants and implementation partners, thereby opening the door to greater public sector collaboration. More broadly, the move towards AI in local government could also raise the bar in terms of customer experience and data use, pushing businesses to adopt similar innovations to stay competitive and relevant.
The Cheshire East example shows how AI is no longer just the preserve of private tech giants. It’s entering town halls, social work offices, and call centres and is quietly reshaping the machinery of local government. If done properly, it could usher in a new era of smarter, leaner public services. However, councils must proceed with care, ensuring that the benefits of AI are fairly distributed and that those who rely on public services continue to feel supported, not sidelined.