TL;DR
The Department for Work and Pensions has advertised a contract worth up to £23 million for a conversational AI platform to steer benefit-related calls. The system will be hosted in a UK-based cloud and must integrate with the department's extensive existing call-handling network.
What happened
The UK Department for Work and Pensions (DWP) has put out a procurement for a conversational AI platform intended to triage and direct incoming benefit queries. The supplier will be required to host the solution in a UK-shored dedicated cloud environment and connect it to the department’s current call-handling infrastructure, which spans roughly 200 sites and supports 27 internal business groups. The platform is intended to understand callers using natural language, direct them either to the most appropriate human advisor, to personalised self-service options, or to other deflection routes, with the stated goals of improving the citizen experience and generating operational efficiencies. The contract is valued at up to £23 million, is due to start in July and run to July 2030 with a possible extension to July 2032. The tender also asks the supplier to carry fidelity insurance of at least £1 million per claim.
Why it matters
- Scale: the DWP handles pensions and benefits for around 20 million people, so changes to call handling could affect a large population.
- Cost and efficiency: the department is pursuing AI as part of broader efforts to reduce spend and streamline service delivery.
- Service performance: DWP in-house telephone lines have missed performance standards in recent years, so new tooling aims to ease pressure on advisors.
- Policy scrutiny and risk: the move is politically sensitive given the department’s size and past operational issues; contractual protections such as fidelity insurance signal risk management concerns.
Key facts
- Contract value: up to £23 million for development and hosting of a conversational AI platform.
- Hosting: solution must be deployed in a dedicated UK-shored cloud environment.
- Integration: platform must work with the DWP’s large existing call-handling system across about 200 locations and 27 business groups.
- Purpose: to determine why citizens call using natural language and route them to the right agent or to self-service options.
- Timeline: expected start in July, scheduled to end July 2030, with a possible extension to July 2032.
- Insurance: tender requires fidelity insurance of not less than £1 million per claim for loss or misappropriation of sums while in supplier possession.
- Previous estimate: an earlier pipeline notice put the contract at roughly £10.8 million including tax; the department has increased the value since then.
- Scale of demand: the DWP manages State Pension and working-age and disability benefits for roughly 20 million citizens, according to the notice.
- Context: the National Audit Office reported a 2.4 million rise in claimants since 2019 and identified millions of avoidable call minutes in 2022–23.
What to watch next
- Identity of the winning supplier — not confirmed in the source.
- Specific performance targets and metrics for reduced wait times or call deflection rates — not confirmed in the source.
- Details of data protection, accuracy guarantees and how human oversight will be implemented — not confirmed in the source.
Quick glossary
- Conversational AI: Software that uses natural language processing and related techniques to understand and respond to human speech or text in a dialogue format.
- Call steering: A system that routes incoming telephone calls to the most appropriate destination, such as a specialist agent, voicemail, or self-service channel.
- UK-shored cloud: Cloud infrastructure physically located within the UK, intended to keep data and processing under local jurisdiction and regulatory regimes.
- Fidelity insurance: A policy that covers an organization for financial loss resulting from dishonest acts by employees or third parties, sometimes required in contracts to manage fraud or misappropriation risk.
- Call deflection: Techniques used to reduce live call volumes by directing customers to alternative channels such as online self-service, automated guidance, or FAQs.
Reader FAQ
How much is the DWP spending on this AI platform?
The contract is valued at up to £23 million.
When will the project start and how long will it run?
The contract is expected to start in July and run to July 2030, with a possible extension to July 2032.
Will the AI replace human advisors?
The platform is intended to direct callers either to the right human agent first time or to self-service options, not to state that it will replace advisors.
Which company will supply the system?
Not confirmed in the source.
PUBLIC SECTOR UK to spend £23M on AI to tell benefit claimants where to go Department for Work and Pensions lines up bot bouncers for one of Europe's largest call-handling…
Sources
- UK to spend £23M on AI to tell benefit claimants where to go
- DWP Customer Service and Accounts 2023-24
- 'Serious concerns' about DWP's use of AI to read …
- DWP plans £11m engagement to ensure long-term future …
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