DWP explores AI chatbots as welfare advisors amid growing job automation fears

The UK's Department for Work and Pensions (DWP) is exploring the use of AI-powered chatbots to support Universal Credit claimants, as the government grapples with the dual challenge of automation-driven job losses and increasing welfare caseloads.

Permanent Secretary Sir Peter Schofield told MPs that the department is considering chatbot-style digital assistants to help claimants navigate applications, training options, and employment support. The technology aims to free up human work coaches to focus on those who need the most intensive support.

"We want to be able to focus our work in a more tailored way so that the people who don't need the interaction with a work coach potentially, in due course, could be able to have an interaction with a digital tool that prompts them, freeing up our work coaches for the people who most need it," Schofield explained.

The timing is particularly notable given that UK businesses reported an 8 percent net reduction in jobs linked to AI adoption over the past year, according to Morgan Stanley research. This represents the sharpest decline among major developed economies.

Universal Credit serves a broad population including unemployed individuals, low-income workers, disabled people, and those unable to work full-time. The integration of AI into this ecosystem suggests automation may end up playing a paradoxical role - both reshaping employment and helping government manage the resulting social impact.

The government is simultaneously expanding its AI partnerships to help citizens navigate the changing labor market. Officials recently announced a collaboration with Anthropic to develop AI-powered tools for career advice and job search guidance, positioning automation as both the cause of disruption and its proposed solution.

Investment minister Lord Jason Stockwell has revealed that universal basic income (UBI) is being discussed as a potential safety net for workers displaced by AI. While UBI remains unofficial policy, its consideration suggests ministers are questioning whether traditional retraining programs and digital job matching tools will be sufficient to address the scale of disruption.

Industry forecasts paint a challenging picture. Forrester predicts that AI and automation could eliminate more than 10 million jobs in the United States by 2030, with administrative, clerical, and junior professional roles most at risk. While these figures are US-focused, few expect the trend to stop at the Atlantic.

The potential future scenario is striking: workers losing jobs to AI, then turning to AI-powered systems for career guidance and potentially income support designed to cushion the impact of automation. This circular relationship between technological disruption and technological remediation raises fundamental questions about the role of government in an increasingly automated economy.

As the DWP experiments with AI chatbots for welfare support, the broader implications of automation on employment and social safety nets remain a pressing policy challenge. The department's digital transformation efforts may ultimately serve as a test case for how governments worldwide adapt their welfare systems to an era of accelerating technological change.