LGR and the AI opportunity – why council leaders need to act now

Over three blog posts, Ross Murray explores what the AI opportunity means for local government reorganisation (LGR). He argues that LGR is taking place at the same time that AI is disrupting usual ways of working across the public sector. This either presents a serious risk or a once-in-a-generation opportunity. The outcome will depend on the choices leaders make today.

The government is embarking on an ambitious local government reorganisation (LGR) programme, replacing two-tier local government structures with new unitary authorities. At the same time, AI has moved into the mainstream; last year, the LGA found that 95% of English councils were either using or actively exploring the technology. These two developments are often treated as separate challenges. I believe that is a mistake. Reorganisation provides a rare opportunity to rethink how councils operate, and AI should be considered as part of that conversation from the outset.

My colleagues at MV have written extensively about the operational side of this transition, including:

• Children’s Services and Local Government Reorganisation (LGR): Significant Challenges in Changing times.

• From Transaction to Transformation: A guide for councils going through the Local Government Reorganisation (LGR) process.

This article also explores the complex challenge facing council leaders as they bring organisations together, integrate services and deliver efficiencies under intense pressure. However, it argues that AI should not be treated as a separate agenda and instead leaders should take this opportunity to lay the foundations for more effective, data-driven and financially sustainable councils in the years ahead which are able to make the most of quickly developing AI.

Learning from past lessons

Previous council mergers offer a clear warning. When teams are under pressure to look like a functional organisation by “Vesting Day” (the official date when a new unitary council takes over from predecessor councils and assumes responsibility for delivering services), they naturally prioritise what the public sees. Visible changes like branding, a refreshed website, a single phone number signal that a new organisation has arrived.

But underneath the surface, the difficult work of integration is often left unfinished. The new council inherits a messy patchwork of incompatible IT systems, inconsistent local policies, and separate back-office. The consequences of this are costly. Staff find themselves navigating systems that cannot talk to each other, and the new council carries the full operational costs of its predecessors without achieving the savings that were promised in the business case.

Somerset Council's transition in 2023 is a clear example. Shortly after Vesting Day, the authority faced a financial restructuring programme of £30–40 million just to remain solvent. A major reason for this was the deferred costs of back-office transformation that had been pushed aside during the reorganisation itself. Looking like a single organisation on Day One is not the same as actually being one.

What’s changed? The AI opportunity

Previous reorganisations did not have access to some of the tools that exist today. AI won't solve the fundamental challenges of a merger on its own but used well, it can change how the workload is managed.

Transition teams are usually buried under the sheer volume of admin required to merge councils. Properly deployed, AI can take on a lot of this heavy lifting: automating routine tasks, matching up messy data from different councils, and finding duplicates that would otherwise stay hidden in separate databases. This frees up capacity so teams can focus on the harder, more important work of long-term integration.

Some councils are already doing this. They are using AI-powered customer contact platforms to give residents a single route into services, even while the back-end systems remain separate. Instead of waiting years for every database to merge, councils can offer a unified customer experience almost immediately. 

Similarly, robotic process automation (RPA) and machine learning are helping with data migration. Moving and reconciling multiple HR, finance, and service databases is traditionally one of the slowest parts of a merger. These new tools automate parts of that transfer, helping councils get a reliable, single view of their data much faster.

A realistic approach

The lesson from previous transformation programmes is not that councils should avoid technology. It is that they should be deliberate about how they use it.

Having worked with councils through complex change programmes, I am less worried that leaders will move too quickly with AI and more concerned that it will be overlooked amidst the immediate demands of merger activity. New unitary authorities will be expected to serve larger populations with the same or fewer resources. Simply stitching together existing systems and processes at greater scale will not be enough.

AI should therefore be seen as one tool within a broader transformation toolkit, helping address specific, high-volume tasks while leaders focus on the harder work of service design, culture and organisational integration.

The risk for today’s council leaders lies more in inaction than in action.

Our previous research has made it clear that new councils must build strong digital and data foundations early in the process, rather than leaving them as an afterthought. Decisions about data architecture and tech readiness need to happen now, alongside the usual discussions about governance and staff structures.

You do not need to be a tech expert to lead this. You just need to ask your teams the right questions: Are we building a genuinely joined-up council, or just a superficial veneer? What will our data look like on Day Two, not just Day One? And are we setting ourselves up to use tools that change how we deliver services, or are we locking yesterday's flaws into tomorrow's budget? 

In February 2026, MHCLG launched a new digital and cyber “playbook” for LGR – explicitly aimed at helping new councils get their data, IT and cyber fundamentals in place for Day One. Missing this window to build your digital foundations is a massive missed opportunity. The task for chief executives is clear: steer your organisation through the structural merger and ensure your data foundations are ready for the future.

I’m not making the point that AI can magically solve all of the challenges of LGR. It can’t. The point is that councils now have tools to handle integration challenges that previous reorganisations just had to accept. The question is whether leaders are bold enough to take advantage of new tools to enable a better reorganisation rather than recreating legacy structures and their limitations on a larger scale.

In part two of this series, Ross moves beyond the macro trends to separate the promise from the reality, examining the specific AI use cases that can support with integration versus those that might not.

How is your authority balancing structural consolidation with digital readiness? Book a chat with Ross and Yannick to share your approach or discuss how we can support your transition planning.