Delivering on Local Digital Ambitions: The Potential of New Technology and Asks for the New Government

Hitachi Solutions X LGC Roundtable

With the budget having provided councils with only temporary relief to huge financial challenges, all eyes are now fixed on the government’s spending review next spring. And for local authorities, there is an intriguing treasury pledge to change the way public services are delivered by “making the best use of digital technology to better deliver services”. For councils, the reality is not yet keeping up with the ambition.

The recent LGC x Hitachi Solutions research found that local authorities see the potential for digital to help them achieve their strategic priorities but their actual plans to use digital lag behind. With these thoughts in mind, 10 senior sector figures from across England gathered in Leeds to discuss their experiences and ambitions as part of an LGC roundtable in partnership with Hitachi Solutions.

Sarah Calkin, LGC’s editor, kicked off the conservation by pointing out that councils see a lot of “untapped potential” in digital and AI helping them deliver services. For example, prevention – every council I know is talking about prevention being a key part of their strategy,” she said.

Paul Simpson, chief executive of Derby City Council, said his authority is looking to use AI to assess care needs for the elderly. “Local authorities spend a huge amount of time understanding information and the implications of that for an individual,” he said. “A care assessment, a financial assess-ment and the delivery of a care package. Then you throw in complexities like safe-guarding issues. But if you feed that information into the technology, it can produce an assessment of an individual’s needs in seconds. And then a human can come in and say, ‘that looks right’.”

Hardyal Dhindsa (Lab), Derby’s cabinet member for digital and organisational transformation, said: “We made a decision just over a year ago to invest in technology and AI. We have decided to take a whole council approach to look at how AI and digital technology can give us an advantage and savings.” And there is plenty of other potential ways AI can save time, said Mr Simpson. “Last summer we ran workshops where we identified 211 opportunities for the application of AI in our council,” he explained.

Matt O’Neill, executive director of growth and sustainability at Barnsley MBC, said AI should be about productivity and taking out some of the system inefficiencies around administration and bureaucracy. But he suggested we are only at the “tip of the iceberg” for councils in terms of AI’s practical application.

Ben Watts, general counsel at Kent CC, suggested the key is not to “oversell” the technology. “It’s about sitting down and recognising the things that we can do well,” he said. “And to not oversell these things and look at them as iterative changes that can be made over a sustained period.”

For Oliver Judges, executive director at King’s Lynn & West Norfolk BC, one useful application for AI is its help with writing reports “We have to write huge amounts of reports and AI can really help pull it together,” he said. “You have to do the sense check, but people are really finding that the productivity drives forward.” Cllr Dhindsa pointed to the digital assistants, called Darcie and Ali, that Derby is using to answer queries via its website: “It has been a success, but it’s a cultural shift as well. It’s about convincing users.”

Key barriers

Predictably, one of the big challenges with embracing digital and AI is funding, particularly for smaller councils. “We don’t have big budgets to implement this stuff,” said Mr Judges. “We know we need to do it and we’re working with partners. But we’ve seen lots of IT projects that don’t go the way they should. That means there’s a big barrier there and people are risk averse.”

Another issue is a fear about AI and its intrusion. “A lot of organisations are culturally quite worried about open AI,” said Mr Judges. “But when it is closed AI, it doesn’t learn particularly quickly. There is also a challenge over data sharing and privacy.” One of the other issues is getting staff on board who are not as confident in embracing the digital world, said Rachel Midgley-Young, interim systems lead at East Midlands CCA. “They might not have the trust and are threatened by change,” she explained.

Graham Stephenson, strategic lead for service improvement and digital transfor-mation at Gateshead MBC, agreed that for some there is a confidence problem. “It seems when people step into work, they forget about all the digital stuff,” he said. “I’ve lost count of the number of times people have said to me ‘I’m a luddite, digital is not my thing’. But then you realise somebody is already constantly doing things online at home and are immersed in the digital world. There’s this misconception that digital is either ‘work’ or ‘out of work’.”

Mr Judges suggested that with the pace of change accelerating in the digital space, people find it “very difficult to keep up”. At Derby, Cllr Dhindsa said it has run a skills audit to see where the gaps are in the organisation. “Then there is the option of re-skilling the workforce and giving them the option to learn and train,” he said.

So what is the solution to this wariness?

“It’s about empowering people and taking away that fear,” said Mr Watts. “Our director of technology recognised this early on and set up a range of training across the organisation. People then felt empowered to make changes to their own workload.” On the wider point around security, he added: “It can be very difficult, it can be scary. But we’ve invested in support and advice around information governance.”

Ms Midgley-Young has identified other challenges around data sharing as a new combined authority that was set up in March this year. “We want to collaborate across four constituent councils and 17 boroughs and districts, but we’re finding it almost impossible because of constraints that local authorities have in terms of data,” she explained. “It makes it very difficult.” On a more general point, she added: “There is a real dearth of understanding of the power of data within local authorities. It’s not just about how can we use technology, but how we can get people in the business to understand the value of it and what it can do for them.”

Kathryn Rees, Stockport MBC’s executive director for corporate and support services, agreed that one of the barriers of AI is funding. She referenced Microsoft Copilot and having to pay out for a monthly subscription. However, she has recognised the productivity boost from using AI: “It’s like getting an extra arm to do extra things.” Stockport has seen success in other areas of digital. “As part of the Greater Manchester combined authority we’ve really tried to collaborate through our purchasing power,” said Ms Rees. “Our full fibre network means that we’ve got one Greater Manchester network that connects 1,500 sites and the result is that it is cheaper for everyone.”

While there are barriers, the panel agreed local authorities should be doing more to embrace digital and AI. Sharna Quirke, strategic director for local government and health at Hitachi Solutions Europe, asked whether the sector should be fostering a “pace of change” in order to catch up. “Is there that appetite to do so, or is it just the weight of these barriers in front of us are stopping us from even attempting that?” she asked.

Mr Simpson said Derby is investing between £1.5m and £2m in AI initially, which it anticipates will bring savings of up to £12m over three to four years. But he added: “Should we be trying to catch up? The simple answer is ‘yes’ because we’ve got a burning platform. We need to grasp this and respond. We can’t keep putting council tax up; we have to find ways of meeting the demand that’s coming over the horizon. But this isn’t a silver bullet.” Mr Judges added: “We’ve got to embrace it and make the change, there’s no question.” At King’s Lynn & West Norfolk he says they are using AI for role play: “You can talk to it – it could be a housing challenge, and it is like a conversation which means it can be used for training.”

How can the Government help?

In terms of asks from government, Mr Watts said he would like to see ministers and officials be “forensic and specific” rather than just make general comments about transformation. “There are loads of good examples of things that are being done well and working out how to work with us to support in the spaces where you talked a little bit about budget challenges,” he said.

He said the government could look at how they fund and support the incubation of ideas so that “all authorities of all sizes can get the benefit of the best ideas in the sector”. He added: “An open sourcing of information amongst each other would be really powerful, if they could find a way to work with us. “All of us as organisations have significant budget challenges. But some of these (digital) projects, if they’re done properly, won’t deliver in the medium term financial plan, but they’ll deliver beyond it. Sometimes that can feel like an indulgence when you’re having a fiscal challenge.”

Ms Midgley-Young said there could be a role for central government to help local authorities to come together to “ask questions of suppliers of how they can be leveraging new technologies to improve their systems”. On this point, Ms Rees said it was about looking at getting more diversity in the supplier market to get better value for money. “We also need more funding for innovation,” she added.

However, there are signs of encouragement from government, says Mr Stephen-son. He points to the Back Office Planning System (BOPS) that was developed under the Department for Levelling Up, Housing & Communities and is now being handled by its successor department, the Ministry for Housing, Communities & Local Gov-ernment. The system has been designed and tested with local authorities. “It has been handed directly over to local authorities to take forward and works great,” says Mr Stephenson. Mr Simpson said that one area to look at is data sharing across the whole of the public sector, including the NHS and the police.

“The Holy Grail for all of us is how can we use data in a more creative way, without the barriers of GDPR and all the hoops that we have to jump through to get to a point where we can talk about people and how we can help them more effectively,” he said. “I don’t know what the government is doing in that space but I think it would be a massive step forward.”

Mr O’Neill said a government push in this area would play into minsters’ core agenda of growth. We’re a world leader in AI and digital transformation,” he said. “But how do you harness that within the towns, cities and regions and actually get behind us?” Ms Quirke said there was a lot of “misunderstanding” about data sharing and what is possible under existing legislation. “We can actually do quite a lot under GDPR,” she said. “It is the culture that is stopping us and that has to come from the top. That has to come from CEOs saying, ‘I want this to happen’.There’s a lot of opportunity around working with our colleagues and leaning on our peers to try and create that swell of change.”

She concluded: “We’ve talked a lot around business cases and obviously that is really important as it all has to stack up financially. But the other part of this is also creating organisations that are going to be functional in five to 10 years time, and not just delivering things, but serving the communities as they are going to be. That’s the conversation that I think we often lose. “We need to be creating organisations that can support that community, environment and society piece. And that’s the part of the conversation I feel we are perhaps forgetting sometimes.”