Methodology note
Require human review of workplace AI: calculation note
Scenario estimate showing gross costs, offsets and behavioural uncertainty; not an official costing.
Central fiscal result
+GBP 1.0bn - Net public-finance impact in 2027-28
Low case: +GBP 0.2bn. High case: +GBP 4.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.
Scenario and baseline
- Require assessments, worker consultation and human review for AI hiring, monitoring and discipline.
- Baseline is current law and published official data unless stated.
- Private business costs are excluded unless they affect tax or procurement.
- Target year is 2027-28, with later years shown separately.
Affected population
- Unit is employers and AI-covered decisions.
- No official affected-count estimate exists.
- Public-sector systems are directly fiscal.
- Private compliance costs are mostly off-budget.
Gross impact
- Central public-sector compliance cost is GBP 0.60bn.
- Regulator and enforcement capacity adds GBP 0.25bn.
- Public procurement/audit duties add GBP 0.20bn.
- No fiscal value is assigned to delayed AI productivity.
Fiscal build-up, central case
- Public AI audits and compliance: +GBP 0.60bn
- Regulator and enforcement capacity: +GBP 0.25bn
- Procurement and systems changes: +GBP 0.20bn
- Tax/receipt effects: -GBP 0.05bn
Central net impact: +GBP 1.0bn in 2027-28.
Behaviour and pass-through
- Low case assumes high-risk-only rules.
- Central assumes public-sector audit duties and enforcement.
- High case assumes broad human-review rights.
- Employers may delay AI deployment.
- Bias reduction benefits are not monetised.
Phasing
- 2026-27: +GBP 0.3bn. Regulator setup.
- 2027-28: +GBP 1.0bn. Main compliance year.
- 2028-29: +GBP 0.9bn. Audits repeat.
- 2029-30: +GBP 0.8bn. Systems mature.
Main source groups
- S1: S1 UK white paper: baseline is principles-led AI regulation.
- S2: S2 Commons Library: workplace AI raises contestability and transparency issues.
- S3: S3 OECD: AI creates productivity opportunities and worker risks.
- S4: S4 Acemoglu/Restrepo: automation can displace work.
- S5: S5 NBER vacancies evidence: AI changes skill demand.