Council workers need to be equipped with digital skills including AI to meet the rising demand for services, according to a new report from Audit Scotland.

Scotland’s councils urgently need to make progress with workforce plans if they are to protect services and financial sustainability, the scrutiny body says in Delivering for the future: Responding to the workforce challenge.

Staff are councils’ most important resource and are vital in delivering services and meeting Scotland’s changing and increasing needs. The numbers of staff employed by councils has risen, but this has not kept pace with ever-rising demand.

Jennifer Henderson, member of the Accounts Commission, said: “We all benefit from a skilled and motivated local government workforce; staff are the most important resource that councils have. Councils must fundamentally reform how they deliver services, and Scotland’s 260,000 council workers are crucial to this.

“Councils need to align their existing workforce plans with their priorities so they can ensure their workforces are the right size and shape, and their staff have the skills they will need. In particular, they need to ensure workers have the digital skills necessary for the scale of changes ahead. We have seen many councils already responding to this challenge, and there are valuable opportunities for local bodies to learn from each other.”

Multiple challenges are affecting Scotland’s 260,000 council workers. As well as increasing demand for services, councils are facing challenges in recruiting and retaining staff, and sickness absence rates are at a record high.

Many councils have initiatives in place to address challenges with recruitment and retaining staff, but urgent progress is needed to have robust workforce plans in place at every council. This needs to: help financial sustainability; address wellbeing; link to future skill needs and drive many more shared services and roles across the public sector.

In a detailed section of the report on technology, it said: “Digital technology has a strong bearing on a council’s workforce needs. It can be used to re-shape jobs to increase productivity and reduce back-office functions while improving service quality. Technology solutions include online services, customer relationship management systems, mobile digital devices and, more recently, artificial intelligence (AI) applications.”

It said: “Councils like Dundee City, City of Edinburgh and East Lothian are investing in digital tools, training, and infrastructure to enhance service delivery and workforce efficiency. Projects across these and other councils include developing AI chatbots, digital skills teams and smart city initiatives.”