This piece has been contributed by Datacom’s Datascape team.
The conversation about artificial intelligence (AI) in local government has shifted. A year ago, councils were asking whether AI mattered. Today, they’re asking how to make it work safely, measurably and in a way that serves the people counting on them.
Over the past year, we’ve heard this tension play out across conference floors, in leadership roundtables and in quiet conversations with council staff who know their work could be different but aren’t sure how to get there. So, we asked.
What over 160 council leaders told us
At three major sector events across Australia and New Zealand in 2025, we spoke with over 160 council leaders and staff, including councillors, mayors, CEOs, CIOs, finance managers and transformation teams, asking them five questions:
- Which council focus areas are you really trying to transform in the next 12 months?
- What outcome matters most?
- Where does your council sit today on the AI journey?
- How fluent are your teams in using AI?
- How well can you measure whether any of this is working?
What we heard back was honest and remarkably consistent. Councils aren’t stalling. They’re in motion. They’re testing, learning, navigating trust and governance and trying to close the gap between what AI promises and what it delivers day to day. Most are in what we’re calling the messy middle: past exploration, not yet at scale and acutely aware that the next 12 to 24 months will determine whether AI becomes embedded in operations or remains a well-intended experiment.
Where councils are on the AI journey
When we asked where councils are focusing their AI efforts respondents named the places where pressure is highest and capacity is most constrained: community experience and engagement, infrastructure and asset management and workforce productivity and automation.
Most councils sit somewhere between exploring possibilities and shaping governance. They’re trialling in multiple stages at once, piloting AI in one area while still figuring out policy in another. What separates councils scaling their AI use from those still navigating pilots isn’t resources or size, but how they’re approaching three specific things.
Datascape’s full analysis maps the five-stage maturity curve, shows where councils cluster, identifies what’s holding them back and reveals the three characteristics that predict whether councils move forward or stall. Download our 2025 local government AI insights report here.
What this means for New Zealand councils
For New Zealand councils, the challenge isn’t whether to use AI, it’s choosing the right approach. The councils we spoke with are already seeing results where AI is applied tactically, including triaging community enquiries during peak times, supporting asset teams with faster condition reporting, summarising inspection notes and removing admin friction.
But there’s a gap between tactical gains and systematic transformation with the difference coming down to architecture.
AI that sits outside your core systems – bolted on through separate licences, disconnected tools or vendor dependencies – can deliver point solutions. But it struggles to work across silos, surface information from multiple sources or compound gains across your operations. Every interaction becomes a separate integration challenge.
AI that has native access to your data structures works across functions without custom builds. This is where we’re seeing the most impact as it turns small, practical efficiencies across thousands of operations into measurable impact.
Making AI operational, not experimental
AI is no longer emerging technology for local government, it’s becoming operational. The real risk now isn’t experimentation. It’s the gap between ambition and execution.
Datascape’s research was designed to help you see your council on the curve against real peers, not in a theoretical model, and highlight practical next steps to move from pilots to embedded, trusted AI. It also shows how embedded, in-platform AI can unlock fractional, compounding gains across your everyday operations.
We’ve compiled all of this, including anonymous quotes from the leaders we spoke with, detailed breakdowns by region and function and a practical maturity curve you can map your council against, in our full 2025 local government AI insights report. If you’re leading transformation, shaping AI strategy or simply trying to make sense of where your council sits on this curve, this report is for you.
