Derby City Council uses Microsoft Azure Open AI to upgrade services

The council is undertaking an AI-driven transformation of its services, underpinned by Azure technology and carried out in collaboration with Microsoft and ICS.AI.

Derby City Council has begun a technical review of its business forecast to save £12.5 million a year.

The council sees emerging AI technology as a vital tool to help it deliver services well and efficiently despite the increasing financial pressures many UK local authorities are facing.

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

“The deployment of AI is huge and touches every corner of the council,” said Andy Brammall, head of digital and physical infrastructure and customer engagement.

Chatbots and automation

In 2023, Derby Council became one of the first councils in the UK to launch telephone-based AI, replacing traditional interactive voice response systems.

It also introduced chatbots, Darcie and Ali, which have handled more than 1.1 million phone and web inquiries to date.

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

Derby City Council’s chatbot Darcie in action

This success inspired the council to step up its AI integration and in 2024 commissioned a major ‘art of the possible’ to identify where AI could make further savings.

They found 261 possibilities to make improvements.

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

In debt collection, for example, the use of AI tools will enable the council to collect and analyze data from all systems faster than staff can currently handle. With this information, the council says it will be able to identify where it needs to offer support to minimize debt and maximize revenue collection.

Derby are now aiming to save almost £4m in the 2024/25 financial year.

Increases value

Derby made another confident move by signing up for a 12-month provisioned deployment contract with Azure Open AI, becoming one of the first public organizations to do so.

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

“This predictability and robustness is a key factor for the future of the council,” says Andy.

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

Gain confidence

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

“For example, we can carry out much more effective reviews of social care,” says Andy.

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

Although chatbots Darcie and Ali are successfully resolving more questions 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 center of this project,” says Andy.

To share is to care

As the first council to implement AI-driven reforms on this scale, Derby is also keen to share its findings.

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

“Well, in our case, no one else had, so we accepted that what we learned would be shared.”

Derby has met with several local authority teams, spoken at forums and shared learning where possible – an expression of a spirit of solidarity and positivity in the public sector, despite the challenges it faces, says Andy.

“The Art of the Possible”

Derby also recognizes that it needs to be nimble to keep pace with AI developments.

“The AI ​​opportunity is moving at a rapid pace,” 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 an important step towards the future of more effective and efficient public services and underlines their commitment to the well-being 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 in the early stages of its AI project and expects it won’t see dramatic changes on the frontline for several months.

But significant benefits are beginning to emerge, especially in multilingual translation and editing tasks, for example, so it seems clear that the best is yet to come.

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