The executive director for resources at West Berkshire Council assesses the role that artificial intelligence can play in the future of local government. But are councils willing to take the ‘red pill’ and learn the truth behind the intelligence?
What does ‘the Matrix’ and local government accounting have in common? Well, actually quite a lot.
Anyone who has tried to put together a set of local government accounts goes on a long and unclear journey with plenty of obstacles in the way, whilst others go about their daily lives oblivious to the complexity involved, only to end up being able to see the numbers right at the end!
That aside, there has been much written about the rise of artificial intelligence (AI) and machine learning. I thought I’d see what AI had to make of our financial statements with the help of our digital overlord at the council, Phil Rumens.
So, what happened? Well, for a start, the sheer size of the financial statements was too much for AI it seems, and it blew up the character limit. The irony of this will not be lost on the local government finance sector at the moment with the ongoing debate about the size of the financial statements.
I don’t think we needed AI to tell us that the accounts are very large, but now it seems that we are even being trolled by machines for having accounts that are impenetrable and too long. Ever adaptable Phil decided to have a go with just the narrative statement, and the results are summarised in ‘tweet’ format below:
Financial year recap: We’ve had a busy year dealing with financial challenges, but we’ve been working hard to manage our funds and provide the best services for you. Inflation and unexpected events, like the Russian situation and the ongoing pandemic, have made things tougher. Despite this, we’ve protected our savings and worked to control our costs. 💰
What we’ve achieved: Our team has been working tirelessly to make sure our community gets the support it needs. Our parks and open spaces, benefits services, libraries, and more have continued to provide great experiences. We’re proud of our efforts in helping local businesses and providing safe care for adults and children. We’re in this together! 🤝
Financial overview: Our budget was planned at £143.8m, but due to various challenges, we spent a bit more, reaching £149.3m. We’ve been using our reserves wisely to manage this. Inflation and economic changes have impacted us, especially in adult social care. Our team has been doing their best to balance everything! ⚖️
Investing in the future: We’re not just managing our budget – we’re also investing in projects that matter to you. Over the next four years, we’re putting £15m towards areas like community improvements and infrastructure. We want to make sure our town thrives! 🌆
Looking forward: We’re planning for the future, considering things like fair funding, adult social care, and more. Our Medium-Term Financial Strategy helps us think ahead. It’s a bit like a road map for the next few years. We’ll keep working hard to provide the best services for our community, no matter what challenges come our way! 💪
So, what does this show?
Well, the summary was pretty helpful overall – there’s a useful set of headings, the summary is succinct and there’s a smattering of emojis, what’s not to like?!
There are some issues – the focus on ‘making sure the town thrives’ does not quite work in an area that is mainly rural and where our main town has less than half of the district’s population.
Does it tell us much about the financial health of the organisation? It shows there was a draw on reserves, but you need to look at the actual MiRS and have some comparative information from something like the Office for Local Government to see that we’re very tight on our minimum level of reserves here. It’s rather light on numbers – having some greater context around the asset base would be helpful.
What does this mean?
Well, I think it shows in large part that the better the information you start with, the better it can be summarised. I can still remember when we would all, and some still do, produce summarised financial statements. Making the accounts and the narrative statement as useful as possible in the first place will only improve the information that AI can interpret better.
At present, there is clearly a role for AI in summarising some very large documents, and that does not apply just to the financial statements. At a cost of roughly 0.5 pence for the API to summarise the example above, the use of AI needn’t break the bank.
Across a wide range of council policies and strategies, there’s an opportunity to make things as simple as possible for the readers of those documents. Are we going to be producing the financial statements fully from AI next year? No. The opportunity to use this tool to organise data and information and mitigate the risk of human error has got to be a big opportunity for our sector. One that by the end of the decade will become embedded in our work.
As this story ends, it’s up to you which pill you want to take – we can take the blue pill and believe whatever we want to believe or take the red pill and we can see how deep the rabbit hole goes. Hopefully, either way, it will help the sector improve our efficiency to free us up to add more value and meet all of the other challenges we face.
Joseph Holmes is executive director for resources at West Berkshire Council.
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