What challenges did Derby City Council face before AI implementation?

Increasing financial pressures on UK local authorities. Need to improve efficiency and quality of public service delivery. High volume of phone and web queries requiring staff attention. Desire to improve adult social care, customer service, and debt recovery operations. Requirement to maintain ethical and transparent use of AI in public services.

What was the impact of the AI solution?

Automation of 43% of telephone and web queries (surpassing initial 20% target). £4 million expected savings in 2024/25, with up to £12.5 million forecasted annually. Over 1.1 million customer queries handled by AI chatbots. Frees employees to focus on higher-value tasks and more effective reviews in social care. Improved multi-language translation and redaction processes.

Source

Microsoft

Derby City Council Transforms Public Services with AI-Powered Automation

Use case typeCustomer service automationUpdated Jun 13, 2026

Derby City Council is undergoing a comprehensive digital transformation powered by Microsoft Azure OpenAI, in partnership with ICS. AI. The initiative aims to modernize public service delivery through the implementation of AI chatbots and phone-based automation, moving far beyond initial ambitions. Chatbots have already managed over 1.1 million queries, leading to a dramatic increase in automated resolutions from the original 20% goal to 43%. The transformation is structured into three phases, currently focusing on 54 applications in adult social care, customer service, and debt recovery, with 261 AI optimization opportunities identified overall. The council expects to save nearly £4 million in 2024/25 and ultimately £12.5 million annually. The project emphasizes ethical use of AI to enhance service quality, retaining accessibility for citizens to speak to human staff as needed, and commits to sharing insights and best practices across the UK public sector. The council established an ethics and compliance board, promising people-centered reforms. Early benefits include faster multi-language translations and improved redaction processes.

Organization: Derby City Council
Industry: Public Sector
Location: United Kingdom
Published: July 2024

Reported outcomes

43%

quantified impactAutomation & deflection

20%quantified impact

Strategic outcomes

New product / capabilityDeployed AI chatbots and phone automationScale & capacityHandled high query volumes automaticallyCost efficiencyExpected substantial public service savingsEmployee experienceFreed staff for higher-value work

Catalog median for automation & deflection deployments: +68% across 125 reported metrics. Compare benchmarks →

Primary read

Use case focus

Showing 3 of 4

1AI Chatbot Automation for Public Services
2Phone-based Virtual Agent for Citizen Queries
3Automated Debt Recovery Data Analysis

Increasing financial pressures on UK local authorities.
Need to improve efficiency and quality of public service delivery.
High volume of phone and web queries requiring staff attention.
Desire to improve adult social care, customer service, and debt recovery operations.
Requirement to maintain ethical and transparent use of AI in public services.

Deployment of Azure OpenAI-based chatbots and phone AI to replace IVRs.
Automated handling of web and telephone queries (achieved 43% automation).
Identification of 261 AI optimization opportunities, with a phased rollout to 54 key applications.
Signed a 12-month provisioned Azure OpenAI deployment for stable, scalable AI access.
Established ethics and compliance board to ensure ethical implementation of AI.

Technologies

Azure OpenAI Azure AI Copilot

Automation of 43% of telephone and web queries (surpassing initial 20% target).
£4 million expected savings in 2024/25, with up to £12.5 million forecasted annually.
Over 1.1 million customer queries handled by AI chatbots.
Frees employees to focus on higher-value tasks and more effective reviews in social care.
Improved multi-language translation and redaction processes.