Councils must turn to innovative technology startups to help them plug the budget black hole they face in the coming years.
Technology can help local authorities deliver services more cheaply and effectively, argues a new report authored by the Mayor of London's digital chief Theo Blackwell and David Cameron's former speechwriter Max Chambers.
More than half of council spending on technology currently goes to a small number of large multinational companies and can stretch over decades, the research for so-called govtech venture firm Public found, locking out smaller firms.
In some cases up to a quarter of council budgets were found to be spent on small and medium sized firms, but in some areas, such as Sheffield and Barnsley that figure stood at just five per cent.
“We need to fundamentally and permanently change the way councils operate - everything from their leadership, decision-making and citizen engagement strategies to their staffing, culture, data utilisation, structures and processes," said Blackwell, who was named the capital's digital chief by Sadiq Khan just over a month ago.
“Through artificial intelligence and cognitive computing, local councils will have major opportunities to automate high-volume and expensive administrative tasks, while gaining faster access to powerful and sophisticated insights that will help policymakers make better decisions.”
The research estimates there will be a £5.8bn black hole by 2020 due to cuts in funding for local government.
Some councils have already embraced such innovation. Enfield council uses a chatbot style agent called Amelia to respond to customer queries, while in Aylesbury an Amazon Alexa skill is offering customer service.
“Technologies like artificial intelligence and the smart use of big data are going to be a key way for councils to deliver a much better service, while freeing up their workers to perform more important and rewarding tasks," said Dan Korski, co-founder and chief executive of Public and a former aide to No 10.