NSW Councils at a Crossroads: Key Takeaways from the Local Government Technology Summit 2026

Australian Smart Communities Association | May 2026

Author: James Sankar, ASCA President

Local government IT leaders from across NSW gathered at The Fullerton Hotel Sydney on 27 May 2026 for the annual Local Government Technology Summit, hosted by Forefront Events. The event brought together Chief Information Officers, technology directors and digital transformation leaders from councils including Penrith, Lake Macquarie, Bayside, Camden, Wollondilly, Blacktown, City of Sydney, Hornsby, Port Stephens, Eurobodalla, Randwick and Shellharbour to confront a sector under genuine stress and chart a more disciplined, outcomes-focused path forward.

The day's agenda spanned foundational infrastructure modernisation, AI readiness, cyber resilience and smart city maturity, with a closing keynote from Professor Marek Kowalkiewicz (QUT Chair in Digital Economy) on the emerging "invisible economy" reshaping how councils must think about service delivery and community engagement. It was a full room of senior technology leaders, directors of corporate services and transformation specialists alongside solution providers, and the energy reflected both the urgency of the moment and the appetite for peer-to-peer exchange.

One theme cut across the entire day: councils are no longer debating whether AI and digitisation are part of the future. The conversation has shifted decisively toward how to leverage these technologies responsibly, practically and in ways that genuinely improve outcomes for both staff and communities.

A Sector Under Pressure

The financial and workforce context framing the day's discussions was sobering. Approximately half of Australian councils are currently not covering their operating costs, while the Federal Government's grant contribution has fallen to around 0.5% of Commonwealth revenue, a significant decline from historical norms. A projected field workforce shortage of around 300,000 positions by 2027 compounds the challenge considerably.

The uncomfortable implication is clear: councils must deliver more with less, and the gap cannot be closed through incremental improvements. This creates both urgency and opportunity around automation, data-informed decision-making and service redesign, and it was this pressure that animated nearly every session across the day.

A broader global dimension was set early through an attendee spotlight session exploring how international technology trends are reshaping how councils design and deliver tech strategies. The message was that NSW councils are not alone in navigating this inflection point, but they do have the advantage of learning from jurisdictions that have already made costly mistakes.

Panel 1: Transforming Local Government for a Smarter, More Efficient Future

The opening panel brought together Jane Howard (CIO, Penrith City Council), Kate Davies (Director Organisational Services, Lake Macquarie City Council), Gaya Gounder (CIO, Camden Council), Marcello Chiodo (Executive Manager Technology and Corporate Services, Shellharbour City Council), Rob Seidel (Director Shire Performance, Wollondilly Shire Council) and Donna Newman (Director Business Development, Civica). Together they explored what a future-ready council of 2030 actually looks like in practice.

A recurring message across the panel was that AI should not be viewed as a standalone initiative or a shiny new thing. Panellists were consistent: AI is simply another tool within a broader digital strategy, and the focus should be on using automation and AI to support genuine business improvement, lift efficiency and help teams manage increasing workloads without significantly expanding headcount.

The concrete examples were illuminating. Kate Davies shared that Lake Macquarie City Council had been manually responding to more than 10,000 service requests before automation pilots were introduced. By implementing digital workers and automated community responses, the council freed up the equivalent of 8 to 10 hours per week to focus on improving responsiveness to residents — a meaningful gain from a relatively targeted intervention.

Rob Seidel from Wollondilly Shire Council offered a different window into the same pressure: rate assessments at his council had increased by 25% while team sizes had remained largely unchanged. This mismatch accelerated the need to streamline processes between customer service and revenue teams, and sharpened the case for using AI and automation to remove repetitive administrative tasks.

Wollondilly also highlighted the importance of establishing a formal PMO and business-led portfolio management early, arguing that without these foundations digital programs struggle to maintain coherence at scale. Penrith City Council spoke to the value of maximising vendor partnership — not just as a procurement relationship but as a source of advisory capability, technology roadmaps and automation pathways — alongside active cross-council collaboration to lift sector-wide capability.

Speakers repeatedly emphasised that councils must first understand the value of a technology before investing in it. With limited budgets across local government, there was strong agreement that councils should focus on leveraging existing vendors, current systems and unused functionality before chasing new tools.

Collaboration emerged as a significant opportunity across the panel. The concept of "council buddies" and shared operating models was raised as a way for larger and smaller councils to work together, maximising technology investments collectively rather than operating in silos — a model well-suited to a sector where the capability gap between large metropolitan and smaller regional councils is widening.

Key advice distilled from the panel: anchor every initiative to clearly defined outcomes with Executive-led prioritisation and sequencing; prioritise quality of delivery over the volume of initiatives in flight; position AI as an enabler within a coherent IT strategy rather than a standalone program; and establish governance foundations early, including data classification, assurance frameworks and safe experimentation protocols.

Foundational Infrastructure: The Prerequisite Nobody Skips

The mid-morning panel on infrastructure modernisation featured Danijel Andric (CIO, Bayside Council), Amy Reynolds (CTO, Port Stephens Council), Wayne Rogers (Director Corporate Services, Blacktown City Council), Dr Tom Gao (CIO, City of Sydney) and Gaya Gounder (CIO, Camden Council). Their central argument was that AI readiness is fundamentally an infrastructure question.

The consensus was that councils must move beyond isolated technology upgrades toward end-to-end infrastructure modernisation: systems that can adapt to rapid technological change, support AI workloads and maintain security and performance simultaneously. Several speakers noted that large councils are progressing multiple AI use cases in parallel, but remain appropriately cautious of overstated benefits and high pilot failure rates.

Gaya Gounder from Camden Council spoke to how councils are already embedding AI into their digital transformation strategies: piloting AI working groups, testing use cases and developing governance frameworks to ensure responsible adoption. The conversation around privacy, cybersecurity and guardrails was, in her view, just as important as the technology itself — and the need for robust governance models will only intensify as AI capabilities continue to evolve.

Rising costs across compute, storage and AI token consumption were flagged as a material concern requiring active management, not passive acceptance. Disaster recovery and resilience posture also featured prominently, as did the case for cross-council collaboration to enable better benchmarking and shared capability uplift. The panel urged councils to actively address technical debt through structured prioritisation rather than allowing it to accumulate as a silent drag on every new initiative.

An interactive session immediately following asked delegates to build their own digital uplift roadmaps, translating strategy into execution. The exercise reinforced the panel's message: moving from ambition to delivery requires explicit sequencing, long-term workforce capability planning, supply chain risk management and genuine executive visibility across dependencies.

Adobe's John Mackenney (Director, Public Sector, Digital Strategy Group) also presented on responsible AI, reinforcing that safeguarding trust and driving innovation are not competing goals but complementary ones, and that digital trust is increasingly a precondition for community acceptance of AI-enabled services.

From Foundation to Action: The 90-Day AI Pathway

Blue Owls CEO and Principal Architect Puran Ticku presented a practical accelerated pathway to production AI that offered a counterpoint to the sector's tendency toward complex, multi-year transformations.

The model demonstrated how a Microsoft-aligned, single-data-source, unified-model approach targeted at one domain — property, customer or assets — can be delivered into production in approximately eight weeks. The approach couples a focused use case with parallel uplift in data governance: classification, ownership definition and quality rules are developed concurrently, not as a sequential prerequisite. The Blue Owls model is built on the observation that councils do not need perfect data foundations before starting; they need a bounded enough problem that progress can be made and measured.

The core message resonated strongly: focus on one domain, reduce complexity, and get something working. Early, focused use cases build organisational capability faster than large-scale, unfocused programs, and they create the institutional confidence needed to scale.

Afternoon Workshops: Where the Real Conversations Happen

The afternoon workshop stream gave delegates the opportunity to go deeper on four themes: what is actually stopping councils from being AI ready (beyond process mapping); digital trust as infrastructure and the challenge of building secure, standardised, trusted digital ecosystems; whether AI is replacing or elevating service management and what this means for operating models; and the "assume breach" security posture that cybersecurity practitioners argue should now be the default.

The workshop format was a deliberate design choice: no sessions are recorded, which creates the conditions for more candid peer-to-peer exchange. Several attendees noted that the conversations in the workshop rooms were as valuable as the main stage content, particularly around the AI readiness session where the honest answer to "what's stopping us?" turned out to have very little to do with technology.

One persistent theme across the workshops was that improving integration, workplace planning and employee experience is becoming just as important as improving the citizen experience. Staff are already managing multiple disconnected systems, and technology change fatigue is real.

Cyber Resilience: Essential but Competing for Attention

The afternoon fireside chat on cyber resilience featured Luke Harvey (CIO, Hornsby Shire Council), Ayman Essmat (CIO, Eurobodalla Shire Council), Dane Hamilton (CIO, Randwick City Council) and Amit Singh (Technical Director, 3columns). The panel addressed the challenge of building practical resilience across councils with constrained budgets, legacy systems and expanding digital services.

The panel was unambiguous: cyber investment is non-negotiable but must be prioritised ruthlessly. Multi-factor authentication, access controls and risk-based prioritisation were identified as foundational. The increasing use of AI by the public is accelerating demand across council digital channels, creating system strain that compounds existing vulnerabilities. Ransomware, social engineering and supply chain vulnerabilities were each called out as live threats requiring active preparation, not just theoretical acknowledgement.

A nuance specific to local government was surfaced: unlike many other sectors, councils have an obligation to remain accessible to the general public. This creates a tension in cybersecurity posture that private sector organisations do not face in the same way — the security measures that might be straightforward elsewhere must be weighed against the need to serve residents who rely on council services and cannot easily be redirected elsewhere.

Resilience, the panel argued, is not purely a technology question. It depends on integrated processes, strong governance and fit-for-purpose technology working in combination. Councils were encouraged to treat service continuity as the core design constraint, with security frameworks built around that outcome rather than treated as a separate domain.

Andrew Wiltshire from Totalmobile presented a case study framed as a cautionary tale. Drawing on Totalmobile's extensive experience working with UK local government, he argued that the real AI dividend for councils comes not from grand transformation programs but from first solving the operational fundamentals — reducing manual labour, bridging the gap between back-office and field service teams, and addressing the layer that sits between citizen engagement systems and ERP platforms. The UK's sustained "doing more with less" austerity approach has produced a well-documented pattern of service failure, financial distress and deferred investment, and Australian local governments have a genuine opportunity to skip those pitfalls by focusing on the right operational layer from the outset.

Closing Keynote: The Invisible Economy and the AI-Enabled Community

Professor Marek Kowalkiewicz of QUT — author of The Economy of Algorithms: Rise of the Digital Minions (La Trobe University Press, 2024) and one of Australia's leading researchers on the digital economy — delivered the day's closing keynote. He framed AI not as a back-office efficiency tool but as a force reshaping the fundamental relationship between councils and their communities.

One of the more memorable framings from the session drew a parallel between AI adoption today and the early resistance many organisations once had toward tools like Google. What initially felt unfamiliar or risky eventually became part of everyday work. The COVID-19 pandemic offered a more recent example: councils with strict on-premises-only policies had to pivot rapidly to work-from-home models, and most did so successfully. The consensus at the summit was that AI is likely to follow a similar trajectory — initial hesitancy giving way to normalisation — but that success will depend on education, governance and clear implementation strategies rather than happening by default.

Several other important themes emerged across the session.

AI proliferation is changing the governance challenge. The rapid growth of AI agents and tools lowers barriers to adoption but simultaneously increases fragmentation and risk. AI is increasingly embedded across services and workflows rather than sitting as a standalone capability, which means governance must be systemic rather than initiative-by-initiative.

Leading organisations are using AI strategically, not just operationally. The organisations pulling ahead are applying AI to strategy development and decision support, not just cost reduction. Councils that confine AI to back-office efficiency will miss its more significant value.

Real-world risk is not theoretical. Examples of AI errors in live environments, misinformation and manipulation risks at scale, privacy breaches and unintended data disclosure were all cited. The concept of "AI nutrition labels" transparent disclosure of data usage and model behaviour — was raised as an emerging expectation from communities and regulators alike, and one that councils should get ahead of rather than wait to be asked.

The growing capability of citizens is raising the bar. As AI tools become more accessible, community expectations of council services will shift materially. Councils need to uplift AI literacy internally to match the pace of change externally, and move from reactive service models to proactive, real-time community engagement.

Culture and trust are the real implementation challenges. Emerging tensions around AI use in workplaces and communities — around trust, attribution and acceptance of AI-generated contributions require active management of reputational risks and public expectations, not just technical governance frameworks.

ASCA's Perspective

The themes from the summit align closely with the planned work ASCA's soon to commence taskforces across AI-enabled local government and the skills and roles dimension of digital transformation. Several observations are worth carrying forward for ASCA members.

Governance before scale. The consistent message across every session was that governance foundations, data classification, assurance, accountability frameworks must be established before scaling. Councils that skip this step are buying future risk, often invisibly.

Workforce is the limiting factor. With a projected 300,000 field workforce shortfall by 2027, the skills and capability dimension of digital transformation is not secondary to the technology question, it is coequal. ASCA's Taskforce 3 work on skills and roles is directly relevant to these pressures, and the summit reinforced that this is a sector-wide concern, not an individual council problem.

Cross-council collaboration as infrastructure. Multiple speakers highlighted the value of benchmarking, shared learning and collaborative approaches to capability uplift. The "council buddies" model discussed during the opening panel is one practical expression of this principle that ASCA's network is well-placed to support and develop further.

The trust imperative. AI governance in local government is ultimately a public trust question. Communities will increasingly expect transparency about how AI is used in decisions that affect them. Councils that get ahead of this build legitimacy; those that don't face reputational exposure at the worst possible time.

Digital transformation in local government is no longer about adopting technology for the sake of innovation. It is about building more sustainable, connected and efficient councils that can continue meeting community expectations in an increasingly digital world. Every council at the summit was at a different stage of its digital journey, but there was a shared commitment across the sector to embrace AI and digitisation in ways that are practical, collaborative and future-focused.

The overarching message of the day was clear: start small, govern well, deliver a working use case quickly, and scale incrementally. The sector is at a genuine inflection point, this is one where the combination of financial pressure, workforce constraints and technological opportunity creates both urgency and the conditions for meaningful change.