A council will use artificial intelligence to cut rent arrears among its 18,000 tenants – potentially saving more than £1 million over the next three years.

Stoke-on-Trent City Council plans to procure an 'AI-enabled analytical solution' to identify tenants at risk of going into arrears so they can be targeted for early intervention before their situation deteriorates.

According to a council report, the authority's current housing management system is 'no longer fit for purpose' at a time when more tenants are falling behind with their rent.

The proposed AI system will cost around £210,000 a year, but is expected to result in net savings of around £430,000 through increased revenue collection, reduced recharges to the general fund and a decrease in bad debt provision.

But the report said there will be no impact on human resources, and the new system will allow staff to focus on complex and high-risk cases by automating routine tasks.

Rent arrears at the council has been increasing over the last few years, reaching a peak of 3.06 per cent in 2023/24, although it has fallen back slightly since then.

The increase is part of a national trend, with the cost of living crisis and the shift from Housing Benefit to Universal Credit – which puts greater responsibility on tenants to manage their rent payments – being among the factors behind the rise.

Cabinet members will be asked to approve the AI proposals when they meet on Tuesday, 19 May.

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Councillor Chris Robinson, cabinet member for housing, believes the AI system will benefit both tenants and the council.

In a statement included in the report, he said: "I totally support the decision and am happy for corporate director of housing, regeneration and operations to have delegated powers to approve the procurement of a cost-effective AI and analytical software solution to reduce current and former tenant arrears, increase revenue collection, reduce exposure to bad debt and provide revenue-based efficiencies."

According to the report, the council currently manages rent arrears using 'basic, reactive triggers' rather than 'intelligent insight'. Using an AI system will allow the council to shift to a more proactive approach, the report says, using data intelligence to identify tenants at risk before arrears escalate.

The report states: "The implementation of an AI-enabled solution represents a fundamental shift from reactive to proactive service delivery. This is not simply a technology upgrade—it is a transformation in how the council manages income, risk, and tenant support."

Council chiefs believe this will benefit tenants by providing earlier, targeted support and reducing the risk of financial hardship.

As the AI system will process tenants' personal data, the report says that data protection issues will need to be investigated. The council will also need to consider whether personal data held by the authority will be used to train the AI.