The Ministry of Housing, Communities and Local Government (MHCLG) has launched a new directorate aimed at expanding the use of artificial intelligence in local government. Led by Tom Smith, the unit is tasked with enhancing service delivery and removing barriers to the adoption of digital tools.
Smith acknowledged progress in the sector but said significant challenges remain. “Brilliant work” is already underway, he said, but widespread adoption of digital solutions is still hindered by structural and technical obstacles. “Digital and data transformation must be central to how councils evolve,” he added, pointing to AI’s potential to boost efficiency and foster collaboration.
The directorate will focus on improving data standards, mobility and integration. Smith also urged better engagement with software suppliers and encouraged councils to respond to a new survey, designed to map challenges and uncover opportunities for data sharing and insight generation. The initiative signals a more coordinated approach to digital transformation across local authorities.
The directorate is part of a wider push by the UK government to overhaul public services through technology. Technology Secretary Peter Kyle has outlined a “giant leap forward” for the sector, centred on cutting bureaucracy and unifying public services. A six-point digital strategy highlights the role of AI as a key enabler of these reforms.
The Lifting Lives programme, championed by Prime Minister Sir Keir Starmer, complements this agenda with a focus on reducing socio-economic disparities. It includes plans to combat digital poverty and improve education access through partnerships with tech firms.
Alongside public service reform, Finance Minister Rachel Reeves has pledged around £86 billion for research and development, part of a £2 trillion public investment strategy. The funding aims to stimulate innovation and job creation, with AI playing a central role in the UK’s economic future.
Despite this momentum, challenges persist. Concerns over data privacy, the energy demands of AI infrastructure, and the risk of excluding vulnerable groups from digital services remain unresolved. Experts warn that equitable access must be prioritised to ensure no one is left behind.
To address these concerns, the government is considering AI growth zones and improved energy efficiency in data centres. These initiatives aim to align AI progress with the UK’s net-zero goals while driving productivity across public services.
As the UK accelerates its digital transformation, balancing innovation with inclusion and sustainability will be crucial. The success of the new directorate may hinge not only on its technological ambition but on its ability to deliver change that benefits all.
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