Tom Loosemore’s excellent piece on the impact of AI on public services is well worth reading. Tom says that a lot of public services rely on friction to stay viable and depend on slow and confusing user experiences “to put off those otherwise eligible“. However, this cannot hold. From parents seeking special needs support to property owners appealing council tax bands, it is the friction of bad service design that restrains demand, not the law. I think this is a more general issue: that friction extends to changing banks and home insurance and just about everything else. His key point, that AI agents will remove that friction and be “doggedly relentless” on the citizen’s behalf, is precisely what Kirsty Rutter and I wrote about in our paper “Where are the Customers’ Bots” in the Journal of Digital Banking 8(2), p.132-140 (2023).
In that paper, we suggested that the coming paradigm shift in retail financial services does not arise from financial institutions use of AI but from their customers’ use of AI. Customers use will AI to assess offers from financial institutions and those customers will have access to AI as powerful as the instituions themsevles, because BigTech will give it to them. This will mean individuals will not be the customers, their bots willl. Given the abilities of the bot already in the market, this is hardly hyperbolic. But what is true for financial instititions will also be true for companies of all kinds and, as Tom highlights, every public sector body too.
We are moving into uncharted waters, frankly. No sane person will ever write a letter to the council appealing a planning decision themselves when their AI agent can not only do it for them, but do it far better than they could do it themselves even if they could be bothered to. Not in the future, but right now. When it comes to the public sector, it seems that complaints (and other enquiries) are rising in both volume and complexity, and generative AI is widely suspected to be a driver, alongside wider demand and austerity pressures. The citizen‑to‑state friction points that Tom refers to (benefits, housing, children’s services and so on) are generating more formal disputes, many of which now travel through digital channels. The implications are longer queues, higher processing costs, more legalistic dispute cultures and, as the Parliamentary and Health Service Ombudsman report notes, strong incentives for public bodies to deploy their own AI for triage and response. While I am not an expert on public sector processes, I can see a rapid escalation in complaints being generated by AI and then sent to publoc bodies that triage them using AI which then results in appeals being generated by AI… and so on to infinity.
Legal and HR practitioners in the UK report that AI‑drafted grievances and claims are typically much longer, more repetitive, more legalistic, harder to parse, with statutory references and case citations that may be irrelevant or, indeed, wholly fabricated. While those practitioners focus on employment and private‑sector disputes, the same patterns are already being observed in complaints about public authorities. Which takes me on to my point, which is that both public and private sector organisations will be, for the foresseable future, at a significant disadvantage in the use of the new technology. Why? It’s because they are regulated. If my bot hallucinates in a complaint about a parking ticket, so what? But if the council worker uses an AI that hallucinates in their response to me about school places, there’s a lawsuit coming (and, of course, my agents will be only to happy to file a mountain of no-win, no-fee lawsuits).
(Now, while it is surely a good thing that having AI remove barriers will improve access to redress for people who previously lacked confidence, literacy or legal support, particularly in complex domains like social care or special educational needs, the benefits will be remain uneven: digitally literate citizens with better access to tools may gain more leverage than those who are offline or have lower literacy, potentially widening existing inequalities.)
I suspect that very few organisations are ready to deal with customers who become thousands of times smarter literally over night.
Snippings 