Fewer Councils, Shared Platforms: What Local Government Reform Means for Scottish GovTech

Last updated: 15 October 2026

In short: On 21 September 2026 the Scottish Government proposed replacing Scotland’s 32 councils with 6 to 10 regional authorities and 120 to 160 community authorities. In the same weeks, the Digital Office for Scottish Local Government published a 2026 to 2028 plan that puts shared data, common architecture and responsible AI at the centre of council technology. For GovTech suppliers, fewer and larger buyers, more shared platforms and higher assurance expectations are now the likely direction of travel.

Key takeaways

• The Scottish Government’s proposal would replace 32 local authorities with 6 to 10 regional authorities and 120 to 160 community authorities, with bespoke arrangements for island communities.
• The proposal is an opening position, not a decision. A three-month engagement with councils, unions and providers aims to reach a shared direction by the end of 2026.
• The Digital Office for Scottish Local Government’s 2026 to 2028 plan lists responsible and ethical AI, data foundations, common architecture, cyber readiness and digital skills among its priorities.
• Both the reform proposal and the Programme for Government 2026 to 2031 point towards shared services, common platforms and collaborative procurement.
• Suppliers that can show interoperability, measurable outcomes, cyber assurance and responsible AI practice will be better placed whichever structure is agreed.

What has the Scottish Government proposed for local government?

The Programme for Government 2026 to 2031, published on 1 September, committed to a conversation on the future of local governance in Scotland. Three weeks later, on 21 September, the Scottish Government set out what it called a starting point for that discussion.

The proposal would replace the current 32 councils with two tiers:

• 6 to 10 regional authorities, focused on strategic decisions such as regional economic development and business support, housing, strategic planning, employability and transport.
• 120 to 160 community authorities, sitting within regional boundaries and focused on local decision-making and community participation.

Councillors would still be elected at ward level and would sit on both their community authority and the linked regional authority. Island communities would have bespoke arrangements, including further exploration of a Single Authority Model. Importantly for technology providers, the proposal says that regional administrative and corporate structures would support both tiers. In plain terms, back-office functions would be organised regionally rather than 32 times over.

This is not settled policy. COSLA and Holyrood committees are considering the proposals, and the Programme for Government commits to a three-month engagement with local government, trade unions and providers, aiming for a shared direction by the end of the year. The current structure has not been reviewed since devolution in 1999, so any change will take time to legislate and implement.

What is in the Digital Office’s new plan for councils?

Running in parallel, the Digital Office for Scottish Local Government has published its 2026 to 2028 plan, marking its tenth anniversary. The plan sets out practical steps to strengthen digital foundations across councils and to deliver Scotland’s Digital Strategy.

The stated priorities include:

• supporting policy and strategy development where digital and data are involved;
• strengthening data foundations;
• embedding responsible and ethical AI;
• maturing Microsoft 365 use;
• improving common design and technical architecture;
• enhancing cyber readiness; and
• building digital skills and confidence across the council workforce.

The Digital Office will raise councils’ awareness of technologies such as AI and the Internet of Things and offer practical advice to speed up adoption. It also plans to use data from the SOLACE Transformation Programme to identify opportunities for collaborative procurement and common solutions, with the aim of reducing duplicated buying. Its chief technology officer, Colin Birchenall, described digital transformation in local government as ‘fundamentally about public service reform’.

That sentence links the two announcements. Whatever the final shape of local government, the digital agenda is already moving towards doing things once, together.

How does this fit with national AI and digital policy?

Councils are not acting alone. Scotland’s AI Strategy 2026 to 2031, published in March, sets out an AI action plan for responsible growth and names local government among the bodies that should develop shared frameworks for public sector AI by 2028. The Scottish AI Register already gives the public a view of how algorithms are used in public services.

The Programme for Government adds further signals for the wider market:

• digital services designed on a ‘tell us once’ basis, with shared data definitions and data sets;
• faster use of Data Exchange so that information held by one organisation can be used safely by another;
• a ScotGov App as a common platform for citizens to reach several services;
• the ePass common licensing approach, which could become a template for payments and casework; and
• consolidation of functions such as estates and procurement, and a review of payment systems, call handling and shared services.

Read together, these point to a public sector in Scotland that wants fewer, better-connected systems and is willing to restructure organisations to get them. For more on the strategy that underpins much of this, see our earlier piece on what Scotland’s digital plan means for GovTech companies.

What does council reform mean for GovTech suppliers?

Fewer, larger buyers

If 32 councils become 6 to 10 regional authorities, the number of strategic technology decisions falls sharply and the size of each one grows. Products bought council by council today, such as housing management, planning, licensing, waste and revenues systems, could be consolidated onto regional or national platforms. That raises the stakes on every bid and makes existing framework positions more valuable.

Migration and integration work

Any merger of councils creates a large programme of data migration, system rationalisation and identity and access work. Suppliers with proven data cleansing, integration and cloud migration capability may find demand rises before any new structure goes live, as councils prepare their estates for consolidation.

Community-level services still need tools

Community authorities would focus on local decisions and participation. That creates room for lighter, configurable tools for engagement, local licensing, green space management and town centre regeneration, provided they plug into regional systems rather than sitting apart from them.

Responsible AI becomes a buying requirement

With responsible AI named as a Digital Office priority and the national strategy calling for shared frameworks, councils will increasingly ask suppliers to explain how an AI feature works, what data it uses, how bias is tested and how a person can challenge an outcome. Our article on Scotland’s role in shaping ethical AI in the public sector covers the principles in more depth.

Uncertainty in the short term

Buyers facing possible merger may delay long contracts or prefer shorter, extendable terms. Suppliers should expect some caution in 2026 and 2027 and plan pipelines accordingly.

What should Scottish GovTech companies do now?

1. Design for consolidation. Make sure your product can run multiple organisations in one tenancy, migrate data in and out cleanly and integrate with common platforms through open standards and documented APIs.
2. Get your AI assurance ready. Prepare a plain-language explanation of any AI feature, its data sources, testing, human oversight and how it would appear on the Scottish AI Register.
3. Prove outcomes, not features. Councils under financial pressure will favour suppliers who can show measured savings or service improvements from existing customers.
4. Strengthen your cyber posture. Cyber readiness is a Digital Office priority. Cyber Essentials Plus and clear incident processes will increasingly be expected. See our piece on cyber resilience as a supplier responsibility.
5. Secure framework routes. Collaborative procurement favours suppliers already on the right frameworks. Our guides to routes into Scottish GovTech procurement and G-Cloud 15 are a good starting point.
6. Join the conversation. The engagement period runs to the end of 2026. Industry views on shared platforms, data standards and procurement can help shape what follows.

Frequently asked questions

How many councils would Scotland have under the new proposal?

The Scottish Government’s proposal of 21 September 2026 would replace the current 32 councils with 6 to 10 regional authorities for strategic decisions and 120 to 160 community authorities for local decisions. Island communities would have bespoke arrangements. The proposal is a starting point for discussion rather than a final decision.

When will Scottish local government reform happen?

No date has been set. The Programme for Government 2026 to 2031 commits to three months of engagement with councils, trade unions and providers, aiming for a shared direction by the end of 2026. Any structural change would then need legislation and a transition period, so implementation is likely to take several years.

What is the Digital Office for Scottish Local Government?

The Digital Office supports Scotland’s 32 councils to plan and deliver digital change together. Its 2026 to 2028 plan, published in its tenth year, covers data foundations, responsible and ethical AI, Microsoft 365 maturity, common architecture, cyber readiness, digital skills and collaborative procurement.

How are Scottish councils approaching AI?

Scottish councils are moving towards a shared, responsible approach. The Digital Office lists embedding responsible and ethical AI as a priority for 2026 to 2028, and Scotland’s AI Strategy 2026 to 2031 expects local government to help develop shared public sector AI frameworks by 2028. Suppliers should expect questions on transparency, data use and human oversight.

Is council reform good or bad news for technology suppliers?

Both. Fewer, larger buyers and more shared platforms mean bigger contracts but stronger competition and higher assurance standards. Mergers would also create migration and integration work. In the short term, uncertainty may slow some long contract decisions, so suppliers should plan for a cautious 2026 and 2027.

Sources

• Scottish Government, Programme for Government 2026 to 2031: Delivering a stronger NHS and public services, 1 September 2026.
• Local Government Lawyer, Scottish Government consults on local government shake-up, 22 September 2026.
• LGIU, Scottish Government’s council reform proposition: what does it mean?
• SPICe, What’s going on in public service reform: October 2026, 9 October 2026.
• FutureScot, Embedding ethical and responsible AI part of new ‘action plan’ for Scottish local government, 13 October 2026.
• Scottish Government, Scotland’s AI Strategy 2026 to 2031: AI Action Plan.

The Scottish GovTech Cluster brings together Scottish technology companies, public sector buyers and investors. Register your interest in the Cluster to stay informed as local government reform develops.