A new report from the Tony Blair Institute for Global Change is urging UK policymakers to radically reimagine local government operations using artificial intelligence (AI), arguing that councils face financial collapse and declining public trust without bold reform. The 97-page report, “Governing in the Age of AI: Reimagining Local Government,” proposes creating a new institution—the Devolved AI Service (DAIS)—to accelerate AI adoption, improve services, and relieve pressures on overburdened councils.
The report, authored by Oliver Large, Laura Britton, and Alexander Iosad, outlines the dire state of England’s 317 local authorities. With an estimated £16 billion funding shortfall by 2029, most councils are raising taxes, dipping into reserves, and diverting resources from long-term priorities like housing and planning to meet statutory obligations in social care and homelessness. Still, backlogs grow and public satisfaction falls.
“Local government is running out of options and time,” the authors write. “It cannot sustain rationing services, dipping into reserves or diverting resources indefinitely.”
The report contends that artificial intelligence offers a way out. By analyzing one council’s task data, the Institute found that AI could automate or enhance 26% of tasks—saving up to one million work hours annually, or roughly £30 million in productivity. Scaling this across England and Wales would amount to £8 billion in yearly savings.
But realizing this potential requires more than technology. Many councils lack the expertise, infrastructure, and negotiating power to implement AI effectively, especially when locked into contracts with dominant technology vendors. Fragmented systems and inconsistent data collection make scaling innovation difficult.
To address this, the Institute proposes DAIS—a central platform jointly owned by councils that would build AI tools, curate standards, share infrastructure, and coordinate procurement. DAIS would focus on three high-impact pilots:
- AI Co-workers in adult social care to reduce paperwork and clear the backlog of care assessments.
- Local Navigation Assistants to guide citizens through services like benefits, planning applications, and permits.
- AI Planning Tools to streamline housing and development approvals, currently mired in delays.
DAIS would be initially funded by the central government, with long-term sustainability from council subscriptions and international exports of its tools and expertise. The Institute emphasizes that DAIS must be accountable, citizen-focused, and built to foster trust—recommending the PEARS framework (predictable, explainable, accountable, reversible, and sensitive) to govern AI use.
The report positions DAIS not just as a tech fix, but as a catalyst for rebuilding local governments’ capacity to deliver. “With the right support,” it concludes, “councils can transform communities, restore trust, and lead a new era of digital public service.”
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