• New report presents vision of where councils might be in 2025
  • Nesta and Public Service Transformation Network say digital technologies can improve services and navigate cuts

Local councils that offer their services online - and are ‘digital by default’ - could save as much as £14.7 billion every year, reveals new research from innovation foundation Nesta and the Public Service Transformation Network.1

The new report, Connected Councils, presents a vision of councils in 2025 and argues local residents, businesses and communities would significantly benefit from digital technologies that improve the delivery of services and help councils navigate tightening budgets. It also argues that the UK can learn from exemplar digital councils around the world such as New York City and Copenhagen.

Digital tools are already helping many councils to improve services, be more efficient and take pressure off frontline staff. But the prize from digitisation is potentially far greater - new digital tools could help councils to focus on preventative rather than reactive care, mobilise local communities to work alongside public services, and facilitate the growth of local economies.  Councils are also experimenting with new ways of collecting and analysing data which could also have a significant impact on the quality of future services.

Connected Councils: a digital vision of local government in 2025 identifies four key opportunities for councils using digital:

  • Save money and deliver better outcomes by intervening earlier, helping people manage their own conditions, and engaging a broader range of social networks to provide support.
  • Transform the way that councils work internally, commission services and partner, diagnose and solve problems, use public space, and attract talent.
  • Make services smoother and easier to access, more personalised and user responsive.
  • Put residents at the heart of local problem solving and decision-making and create an environment which supports businesses to startup and scale.

To help embed digital within councils, the report recommends that central and local government   work together to define data standards for the sector, stimulate new ideas and help the public navigate online services.

Councils that seize the opportunity to move online will still require frontline staff. While job losses will result from back office processes being automated, councils could offset the impact on local economies by taking a more active role in stimulating economic growth.  

Julie Simon, head of government innovation research at Nesta, said: "As budget cuts begin to bite councils have found themselves at a crossroads. Although digital technologies are by no means a silver bullet, they can help councils improve on the important services they offer; transforming their delivery, stimulating economic growth and ultimately improving the way they manage themselves and their resources.”

The report includes best practice examples: New York City was the first city council to open up its data and use analytics to improve services while 80 percent of Copenhagen’s transactions now happen online. In the UK, The London Borough of Harrow has saved £1.55million by moving transactional services online and Leeds City Council is bringing together community groups and local tech companies to inspire innovation in elderly care.

Connected Councils: a digital vision of local government in 2025 is available at www.nesta.org.uk.

Nesta is also working with Cardiff University as part of Y Lab and Welsh Government to support public service organisations in Wales wanting to use digital technology to trial smarter, more future-facing ways of working.



  1. Nesta commissioned Social Finance to model likely cost increases from demographic change, and project how much could be saved from digital. Based on best in class case studies compiled by the Local Government Association and original case studies, the model shows that if average savings from digitisation programmes can be replicated across local government, an average unitary council could save up to 13 per cent of its total budget by 2025, compared to the status quo. Based on 2015-2016 spending of £113.1 billion for the sector, this represents £14.7billion.

About Nesta: Nesta is the UK's innovation foundation. We help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. We are an independent charity and our work is enabled by an endowment from the National Lottery. Nesta is a registered charity in England and Wales 1144091 and Scotland SC042833

www.nesta.org.uk / @nesta_uk

About the Public Service Transformation Network: The Network is a cross-government project tasked with jump-starting the transformation of local services. Made up of central government departments, local authorities, voluntary and private sector providers, the Network’s members provide guidance and expertise on place-based reform of services.

For more information contact Laura Scarrott in Nesta’s press office on 0207 438 2697/ laura.scarrott@nesta