AI will save UK public sector £10 billion in next five years, says Tony Blair

The potential of artificial intelligence means despite Britain's economic woes, now is the best time to be 'harnessing effectively the 21st century technological revolution'

Tony Blair speaking during a Tony Blair Institute for Global Change's Future of Britain Conference in central London. PA

The UK's new Labour government has a unique opportunity to employ emerging technologies, particularly artificial intelligence (AI), to blow the cobwebs off the British economy and set it on a path to significant growth, according to former prime minister Tony Blair.

In an address to the Future of Britain conference at the Tony Blair Institute (TBI) in London on Tuesday, Mr Blair said: “AI means there has never been a better time to govern.”

The new government has inherited an economy hobbled by anaemic growth, high taxes, government debt at its highest level for 60 years and high spending on public services that often perform poorly.

Getting up to speed with the highest international standards, including the innovation seen in the GCC region, would mean the UK harnessing effectively the 21st century technological revolution.

“Globally, countries across the GCC are investing a huge amount in this agenda, and have taken a leadership position in developing AI and deploying it in the field of public services, and they are especially well placed to take advantage of developments in this fast-moving area,” said Jared Haddon, TBI's Mena region lead on AI told The National.

Mr Blair added AI will enable advances which might have taken decades will “happen in a few years or even months” and that improvements in efficiency and the radical benefits, could be “truly revolutionary”.

“The simple and unavoidable truth is that unless we improve growth and productivity, and drive value and efficiency through our public spending, we're going to become poorer. Much poorer," he said. “This explains the mood of pessimism evident in much of the election campaign.

“But I do not share the pessimism. On the contrary, I don't think there has ever been a better time to govern. A better time to effect change. A better basis for optimism and a surer reason for hope.”

'Significant and growing gains'

AI has been a hot topic in government circles for some time, and former prime minister Rishi Sunak held an international summit on AI safety at Bletchley Park in Buckinghamshire last year.

For example, the TBI outlines in its report The Economic Case for Reimaging the State that by enthusiastically adopting AI in the public sector, a fifth of the workforce can save time and money – money to the tune of £10 billion by the end of this parliamentary term and £35 billion by the end of the next,, or in 2034.

In addition, the institute predicted that preventive healthcare technology will deliver a triple benefit of “a healthier population, a healthier economy with more people in work, and healthier public finances”.

The TBI uses the example of a preventive healthcare programme looking at cardiovascular disease, which it said could result in an extra 70,000 in work (all paying tax and spending in the economy), as well as an annual savings to the UK Treasury of £600 million within five years and £1.2 billion after 10 years.

A digital ID has been put forward by the TBI as a 21st century solution to 20th century socio-economic problems in that it will speed up the access citizens can get to public services and save almost £4 billion in the next five years, because it will combat benefit fraud and improve tax collection.

On a practical level, if AI was used to pre-populate tax returns, £600 million could be saved every year.

The TBI estimates that setting up the infrastructure to run a digital ID system would cost about £1 billion and £100 million to run every year, but it would cover the set-up costs within three years, after which the system would raise just under £2 billion a year for the Treasury.

Looking further ahead, the TBI forecast that introducing AI into the UK's education system would increase GDP by about 6 per cent.

The TBI pointed out that the technologies, like AI, it is basing its forecasts on relate to the present day. Any advances in those technologies could result in higher savings and larger cost reductions in the years ahead.

“While the figures are speculative, the direction of travel is clear,” the TBI said in its report, “by investing in AI-era technologies today, the government can reap significant and growing gains in the future.”