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Local authorities continue to face funding restraints while remaining under pressure to improve services. As a result, some are turning to artificial intelligence (AI) to help drive efficiencies and improve public outcomes. However, many organisations are struggling to get value from their AI investments. Greater literacy can help.So, why is literacy important and what does this mean in practice for local authorities wanting to upskill their organisations?The drive to adopt AIMany local authorities face a significant funding gap. New research from Unison, the public services union, shows that four out of five councils across England, Scotland and Wales are struggling financially. Some 368 local authorities across the country face a combined funding gap of around £4bn.Despite these funding restraints, local authorities are still expected to meet residents' needs and improve service delivery. Residents continue to demand that councils are responsive to hyper-local issues while recognising the need to improve quality through greater resources and efficiencies.Against this context, local authorities are turning to AI. It has the potential to help councils deliver better outcomes for residents by improving efficiencies and enabling more responsive public services.AI can reduce the administrative burden for councils and help staff focus on higher-value tasks. Local authorities are already using AI to support customer services and contact centres, aid social care and housing caseworkers, identify fly-tipping and littering and help prevent falls and homelessness, according to the Local Government Association (LGA).Getting valueHowever, research shows that despite a $30-40bn enterprise investment in generative AI, some 95% of organisations get no return. For local authorities, only 7% of councils are innovative and considered leaders in their use of AI. Half are just at the beginning of their AI journey.So, what is holding local authorities back and preventing them from gaining value from their AI investments?One of the biggest barriers to adoption is a lack of employee capabilities and capacity. Local authorities do not have the required AI literacy to adopt AI successfully and get value from their investments.Other challenges include a lack of an overarching AI strategy; a lack of relevant, role-specific training; and a growing ‘shadow AI economy', where individual employees use consumer products such as ChatGPT without leadership knowledge or approval.On top of that, we find that many local authorities are concerned about cyber security, data protection and how to govern the technology.Without proper strategy, governance or training, this poses significant risks. Council employees may be exposing sensitive information. Many are not trained to spot the hallucinations and biases AI content can contain.There is much discussion around AI and its potential impact. While we must be cognisant of such discourse, the reality remains that local authorities are using and will use AI to drive efficiencies and enhance local services. Given this, they must understand how to do so properly and responsibly.The importance of AI literacyGreater AI literacy is critical if local authorities want to realise the benefits of AI while mitigating the risks. Relevant and tailored courses and training can help local authority leaders and employees learn exactly what they need to know.Such literacy can help local authorities and their people understand how AI can enable them to become more effective AI innovators, improve efficiencies and deliver better local services which meet local needs.Moreover, since August this year, the EU AI Act requires individuals to develop AI literacy and organisations to have an AI policy. Even if an organisation does not need to comply with the Act, a fit-for-purpose AI policy is essential.To help local authorities navigate a crowded and complex AI landscape and drive responsible AI adoption, OnTrack International has launched a series of accessible courses, tailored to public sector organisations, roles and capabilities.Greater literacy can deliver more innovative solutions and tangible benefits. For instance, Transport for West Midlands has successfully conducted a near-miss road collision proof-of-concept. This project has already identified 61,000 near-miss incidents, which has informed the implementation of cost-effective and targeted interventions to reduce road traffic accidents.When councils face continued funding challenges yet are under pressure to deliver better and cheaper public services, AI can help. But greater AI literacy must come first.Ben White is executive consultant at consultancy OnTrack International

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Gaining value from AI

By Ben White | 26 October 2026

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