Derby City Council uses Microsoft Azure Open AI to upgrade services

The Council is performing an AI-powered transformation of its services, underpinned by Azure technology and undertaken in collaboration with Microsoft and ICS.AI.

Derby City Council has embarked on a technological overhaul of its operations forecast to save it £12.5m a year.  

The Council sees emerging AI technology as a vital tool in helping it deliver services well and efficiently despite the increasing financial pressures facing many UK local authorities.

While Councils are starting to explore the potential of Generative AI – applying Copilots to specific areas of business, for example – Derby’s plans are more ambitious.

“The deployment of AI is vast, touching every corner of the Council,” says Andy Brammall, Director of Digital and Physical Infrastructure and Customer Engagement.

Chatbots and automation

In 2023, Derby Council became one of the first UK councils to roll out phone-based AI, replacing traditional interactive voice response systems.

It also introduced chatbots, Darcie and Ali, that have so far managed more than 1.1 million telephone and web queries.

While Derby initially hoped to handle 20% of traditional phone conversations automatically, it actually achieved 43%, and this figure continues to rise.

This success inspired the Council to step up its AI integration, and in 2024, commissioned a major “art of the possible” operation to identify where AI could make further savings.

They found 261 opportunities to make improvements.

In the first phase of a projected three-stage digital transformation, it is focusing on 54 applications in fields where AI can be implemented most quickly – with adult social care, customer services, and debt recovery as the main priorities.

In debt recovery, for example, using AI tools will enable the Council to gather and analyse data from across all systems more quickly than staff can currently manage. With this intelligence the Council says it will be able to identify where it needs to offer support to minimise debt and maximise income collection.

Derby is now aiming to save nearly £4m during the 2024/25 financial year.

Adding value

Derby made a further assertive move by signing up for a 12-month ‘provisioned deployment’ deal with Azure Open AI, becoming one of the first public sector organisations to do so.

This will give the Council guaranteed access to AI capacity at a stable price, allowing it to scale up and evolve without worrying about service glitches and price changes.

“That predictability and robustness is a key factor for the Council going forward,” says Andy.

“A fixed-based approach also really helps with cost control, rather than the bill each month being a lottery.”

Winning trust

The Council is keen to stress that most efficiencies will emerge as AI frees up employees to focus on higher-value work they currently have less capacity for, rather than through total automation of human tasks.

“We are able to undertake much more effective reviews of social care, for example,” says Andy.

And the Council is also careful to reassure local citizens that it will use AI only to improve services, never to take any of them away.

While chatbots Darcie and Ali are successfully resolving more queries than expected, residents can still speak to Council staff by phone or in person if they prefer.

As part of the AI transformation, the Council established an ethics and compliance board while making clear assurances that value would always come before savings.

“It’s very important that people are always at the heart of this project,” says Andy.

Sharing is caring

As the first Council to undertake AI-powered reform on this scale, Derby is also keen to share its findings.

“When you put forward a business case, every executive board will always say to you: ‘Who else has done this? Who can we learn from?’,” says Andy.

“Well, in our case, nobody else had done it, so we accepted that what we learned we would share.”

Derby has been meeting with multiple teams across local government, speaking at forums and sharing learning wherever possible – epitomising a spirit of solidarity and positivity across the public sector, despite the challenges it faces, says Andy.

‘Art of the possible’

Derby also recognises it must remain agile to keep pace with AI development.

“AI opportunity is moving at a rapid rate,” says Andy. “Trying to predict two, three years in advance would possibly be foolish.

“So we’re looking much more regularly and iteratively at what the evolving art of the possible is.”

Martin Neale, CEO of ICS.AI, said: “Derby City Council’s journey with AI marks a significant step towards the future of more efficient and effective public services, and underscores their commitment to the wellbeing of residents.

“We are excited to see how these new AI copilots will redefine service delivery and set new standards in public service innovation.”

The Council is still at the start of its AI project, anticipating it will not see dramatic changes on the frontline for several months.

But sizeable benefits are beginning to emerge, notably across multi-language translation and redaction tasks, for example, so it seems clear that the best is yet to come.