Civil Service: Artificial Intelligence Productivity Gains

Debate between Lord Howell of Guildford and Lord Vallance of Balham

Monday 1st September 2025 Lords Chamber

[Lord Vallance of Balham (Lab)]

It was interesting to see the report from MIT last week on the use of AI across companies, which noted that 95% of companies got very little benefit and 5% got massively disproportionate benefit. One of the reasons why you get much greater benefit is training people properly and allowing there to be proper disruption of existing workflows—so I completely agree with the question. What the noble Lord is talking about is an important part of this, which is why there is a series of schemes across the Civil Service, including the senior Civil Service, both to recruit people with AI skills and to train staff.

[Lord Howell of Guildford (Con)]

My Lords, I declare an interest as a former Minister for the Civil Service—although it was an awfully long time ago. The record shows that the biggest increase in output and productivity in the Civil Service and the biggest fall in numbers in modern times occurred between about 1972 and 1982. Of course, the driving force for that was not so much energy efficiency, although there were attempts to improve that, as removing whole industrial functions from the public sector. The Civil Service numbers fell from about 815,000 down to about 510,000 in 1982. That was an enormous cost. The lesson of that is that, if one really wants to increase productivity and slim the Civil Service, as I believe the Government do, there should be the removal of whole functions from the Civil Service—in this case, the industrial Civil Service—into the private sector.

[Lord Howell of Guildford (Con)]

The question is: what areas are the Government going to look at now to remove functions from the state sector, which will be the sure way to increase productivity and reduce numbers?

[Lord Vallance of Balham (Lab)]

It is an area where AI is important, because AI does just that. There are certain things AI does to improve the efficiency of what is already done, and certain areas in which it does things that cannot currently be done. Both of those areas will lead to disruption of current workflows. This goes back to my previous answer: the disruption of workflow around AI is the big change management challenge.

Artificial Intelligence Opportunities Action Plan

Debate between Lord Howell of Guildford and Lord Vallance of Balham

Thursday 16th January 2025 Lords Chamber

[Lord Vallance of Balham (Lab)]

I thank my noble friend. There are two different aspects to his SME question—the SME use of AI, and the AI SMEs—and both are dealt with in the report, I think. Many of the recommendations indicate what would be done, but I will outline some of the points on SMEs for AI. There is an important join-up task to be undertaken, which is part of what this plan does: the things we fund at the beginning of the process, such as grants from Innovate UK to get companies off the ground, to supporting that funding through BBB and beyond, linking to regulation to make it as simple as we can to enable innovation, and linking in turn to procurement to ensure that there are procurement signals to allow these companies to get the investment to grow and to scale into the companies they could be.

On the adoption side, there is a specific group working on adoption of AI technologies across the UK and a report is due out by the Government Chief Scientific Adviser and the National Technology Adviser on adoption of technologies more broadly, which is about ensuring that we get uptake of new technologies in companies. We know that we have a long tail of companies that do not do that in the UK, and it will be an important part of making sure that the entire economy benefits.

[Lord Howell of Guildford (Con)]

My Lords, I am sure the Minister has noted that the Statement he has given us has a certain flavour of the 1960s about it, with the talk of harnessing the “white heat” of revolution, and all that, but from the point of view of those of us who went through that period, it might be helpful to know one or two of the things that went wrong, because it did not end terribly happily the last time we had this revolution of white heat. The problem then was that the Government’s PR people became a little too enthusiastic, and the Minister might discourage them today from phrases about seizing the future, embracing this, that and the other, and other generalities, of which there were plenty last time, but none of them led to the results that people wanted.

There is a repeat of the old fallacy that the Government deliver growth. It does not. We know that the Government can facilitate growth and can stop growth, and certainly that has happened in the past, but the idea that the Government alone are somehow going to lead, rather than develop entirely new relationships with the private sector as the digital age demands, is one that needs to be examined carefully before the Government rush into more mistakes.

There is another problem, which the noble Viscount, Lord Stansgate, reminded me of—it was not quite so intense then but it is intense now. This whole revolution and the data centres demand enormous amounts of electricity—far more than seems to be planned by the energy department. It talks about 200 gigawatts, moving up from 65 gigawatts, but data centres can drink whole communities’ electricity, just like that. The Statement mentioned 500 megawatts, but we are really talking about gigawatts of a kind for which no planning is in place at the moment. Can we be assured that the SMR side of the Government’s energy transition gets a push? Will the Minister talk to the energy people and tell them that, unless they bring forward the SMR revolution, which is going on in many other countries, and go slow on the white elephant technologies such as Sizewell C—