This moment represents a vital opportunity to reform the role of digital in local government. The new Labour government has committed to a decade of national renewal through both a set of five national missions and a commitment to being mission-driven – that a new approach to statecraft is required to meet the challenges the country faces. The new government’s English Devolution White Paper proposes the most significant change to our sub-national governance for half a century. The government’s leadership on the role of experimentation in policy and service design through the Test, Learn & Grow programme led by the Cabinet Office and the leadership by the Prime Minister through the AI Opportunities Plan reinforce the potential for change.
It couldn’t come at a more important time. 15 years of systematic defunding of local government has seriously deteriorated the conditions in which councils have been forced to operate. There were more section 114 notices in 2023 than there were in the previous 30 years, eight councils were given permission to raise council tax above the legal maximum and 30 secured ‘exceptional financial assistance’ to balance their budgets for 2025-26. While Government’s early steps to commit to multi-year settlements and abandon competitive funding streams are hugely welcome, an ongoing and sustained financial crisis in local government is a significant barrier to advancing longer term thinking and greater innovation in service design within the sector.
We believe this report is the first of its kind and yet the issues interviewees discussed with us are far from new. They pointed to little progress relating to the digital agenda in local government over the last 15 years and many recurring issues without resolution. Interviewees described a sector where too often the role of digital remains on the margin of councils, rather than playing a key role in shaping strategy, services and delivery. While the issues we highlight here are well rehearsed within the sector, they haven’t been documented in one place and as the government’s own State of Digital Government Review of the state of digital in government shows local government is by no means alone, this stagnation is arguably more pronounced in local government.
Councils are themselves complex systems responsible individually for hundreds of services, and rightly proud of their democratic accountability directly to residents. However, the strength of that independence is also in part the root of the challenge. On the one hand we heard about a high level of duplication across a local government sector that is fragmented by nature, often leading to 320 councils repeating the same process, procurement or design sapping their vital resources. Equally, we also heard that it was harder to harness the power of the sector collectively either in how digital can help resolve universal challenges or leverage its collective power with the private sector. As a result, despite the ever growing importance of technology in all our lives, the use of digital remains underutilised or really understood.
What we mean by ‘digital’ is often understood as interchangeable with ‘tech’ over a wider definition encompassing innovation, data and how we work and ultimately deliver modern public services. For the avoidance of doubt, when we reference ‘digital’ in this work, we are using Tom Loosemore’s definition:
“Applying the culture, processes, business models and technologies of the internet era to respond to people’s raised expectations”
The government’s own State of Digital Government Review of digital in government highlights the underinvestment in digital expertise in local government compared to other parts of the public sector. Digital expertise represents only 2% of total headcount compared to double that in the NHS and below a wider public sector benchmark of 3%. Digital roles in the wider technology sector continue to fail to reflect the diversity of the communities councils serve, with women, Black people, disabled people and older workers in particular all significantly underrepresented. The pay gap between the public and private sector is as much as 35% and those working in digital roles in local government highlight few career development opportunities in the interests of representation. Council chief executives with digital expertise are rare and digital leaders are less likely to be part of the executive leadership in councils to help drive the integration of digital expertise or ways of working in the context of local government service provision. We found that greater understanding and prioritisation of digital as a discipline by political and executive leadership was also often lacking.
And doesn’t work either for councils or suppliers. Crucial systems across services are too often dominated by a small number of large suppliers, both locking councils into closed systems, and locking out a wider diversity of potential suppliers.
Councils hold a huge volume of data about their residents which could help find the answers to bigger questions both internally and together with other partners. However, all too often, that intelligence is trapped in locked individual systems and either can’t be extracted or connected to other systems internally, or shared with external partners. Equally, there are behavioural barriers at play which get in the way of the flow of data across systems.
What is clear from our work is that we can’t carry on as we are. The status quo is not sustainable and there is almost untapped potential for the role of digital as an instrument of genuine change and reform throughout the sector, matched by the bold and ambitious leadership among the digital and progressive non-digital leaders in the sector.
The government’s plans to establish a series of new strategic authorities as part of its proposals to complete English devolution, also provide an opportunity to build new institutions, born in a digital age. From day one these new authorities should reflect the central importance of digital as a discipline in those organisations – fit for an increasingly digital future.
Government’s commitment to a mission-driven approach – not just the mission themselves – involves a greater prominence of experimental approaches to public service reform, as set out by the Chancellor of the Duchy of Lancaster, Pat McFadden in December 2024. The Test, Learn & Grow programme offers opportunities to make some of this change – to hardwire greater innovation within councils and how they operate by testing new approaches, working in the open and trialling ideas to make experimentation a more intuitive approach to policy and service design in local government.
“I’m going to begin by saying something that politicians don’t say very often (though they probably should) which is that I haven’t got all this figured out from beginning to end…In the digital age, you don’t have to work out precisely what you need to build at the start, and then start building it….You can start with something small and try it out. Test it on people. Fix the problems. Change the design. Test it again. Throw it away and start again cheaply, if it doesn’t work. Tweak it again. And so on, and on, for as long as you provide the service…. Suddenly the most important question isn’t ‘How do we get this right the first time?’ It’s ‘How do we make this better by next Friday?’”
– Pat McFadden MP, Chancellor of the Duchy of Lancaster
Below is a summary of some of the biggest challenges surrounding the local government digital agenda that we heard through this process. This list isn’t exhaustive, but instead aims to illustrate the main and shared themes of these conversations and this research.
There are a large number of organisations and bodies (i.e. Local Government Association; Ministry of Housing, Communities & Local Government; Department for Science, Innovation & Technology; Government Digital Service) who each have a formal or informal stake in the game around ‘digital’ in government. Currently there is a sense of little political or strategic coordination or agreement on mandate or responsibilities from the centre or importantly what support is available from where to councils.
This is leading to:
We don’t currently have a fit-for purpose infrastructure that supports the sharing of learning, practice and what works both within local government at a more local or regional level; and between local and central government.
This is leading to:
Local authorities hold huge amounts of data about places and people. However the quality of this data is still hugely varied and contains significant gaps. There is a risk that some councils may see AI and Large Language Models (LLMs) as a silver bullet to many of their challenges; however there is still a huge amount of foundational work to do (both cultural & technical) before councils are able to make the most out of the opportunities of emergent technology or forms of artificial intelligence within their existing tech stack. Lastly, as many organisations (and services within councils) operate with their own standards, regulation, ethics and ways of working around data; we shouldn’t underestimate the work there is to be done to build trust across silos.
This is leading to:
Despite over 15 years of ‘digital’ rising up the local government agenda, amongst many organisational and political leaders, digital is still regarded as ‘the tech’. With digital not being seen as of strategic importance and pivotal in organisational change or reform. This is leading to:
The sector struggles to attract and retain the right talent, and skills are not evenly distributed amongst those outside of urban centres or cities – having an impact on economic growth of areas. Beyond this though, as a sector we don’t have a structured or coordinated approach to how we are addressing the significant under-representation in our workforce of women, people from global majority backgrounds and those from other under-represented backgrounds. In addition we don’t have clear or varied enough pathways for people to enter or transition into digital careers within government.
This is leading to:
Across the sector there are few consistent standards applied around digital in a local government context. As well as no real playbook for how the sector should go about using digital as a means to drive organisational or sector wide reform and transformation. Although, this work would look different dependent on the political, cultural, demographic and geographic context of an individual council or place; the lack of consistent standard setting and oversight across local government around digital is leading to:
Currently there are limited ways to coordinate, and use the collective power of local government to influence what is being built/sold by the big suppliers and ultimately ‘shape the market’ so it better meets their needs and reduces cost. On the flip side, local government is deemed as a challenging and risky market to enter and to continue operating in for suppliers (particularly SMEs) due to burdensome and costly procurement processes, increasingly complex and competing requirements’, reducing budgets and complex, political stakeholder environments.
This is leading to:
