The public sector has yet to significantly realise the benefits of digital transformation with 75 percent of UK organisations yet to fully implement strategies.
The data – which was gathered by Unit4 for its 2025 State of Digital report into digital transformation in the UK public sector – indicates digital transformation has stalled, and in some cases, is going backwards.
Seventy percent of residents struggle to access data in real-time with half (50 percent) having to manually export data, compared to 40 percent in 2023.
Moreover, 53 percent are not completely confident digital transformation will be delivered within budget and 45 percent admit it will not be delivered on time, while 59 percent do not feel it has achieved value for money.
In January the UK Government unveiled a raft of changes and new technology designed to modernise tech and deliver better public services. It followed a review which found public sector workers are being held back by archaic technology.
“At a time when the UK public sector is facing huge pressure to reduce costs but still improve citizen services, it is imperative that digital transformation strategies show tangible benefits in the shortest possible time,” said Mark Gibbison, AVP global public sector and higher education, Unit4.
“This is no easy task given the complexity of existing IT systems, but there is positivity when it comes to organisations remaining committed to modernisation. Now is the time for senior leaders to provide clear guidance on strategy, because implementing more innovative, cloud-native applications will empower employees to be more agile and scale services rapidly while driving cost efficiencies.”
What is the state of digital transformation in the UK public sector?
But despite slow progress, UK public sector organisations are not giving up on digital transformation and still believe in its value. Most survey respondents (89 percent) remain positive about the future of the public sector and 74 percent expect to complete their change strategies in two years versus to 49 percent in 2023.
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Eighty-five percent say connected back office systems and shared data will have a positive impact and 40 percent are already adopting artificial intelligence (AI), showing a willingness to innovate.
However, they also highlight a range of obstacles, including a significant increase in red tape – 41 percent vs 28 percent in 2023 – impacting services and targets
Changing priorities (41 percent) and leadership resistance to transformation (37 percent) remain the two biggest challenges in 2025, but worryingly the biggest increase is in organisations that do not plan well for change, so they do not know how to react – up to 31 percent from 24 percent in 2023.
Where is the UK public sector focusing digital transformation?
UK respondents cite several ways they will drive cost savings, with a huge increase in 2025 in those saying they will adopt lower cost solutions for efficiencies through collaboration. They also highlight a shift to Software-as-a-Service (SaaS) solutions to reduce hardware and maintenance costs, as well as using outsourcing services which may explain the leap in those wanting to join a shared service – 29 percent up from 15 percent two years ago.
More encouragingly, there is less emphasis on making cuts to citizen services in this year’s report cited by 30 percent compared to 37 percent in 2023. Short-term, there will also be a focus on improving reporting capabilities and the integration of back office systems, as well as achieving greater value for money.
If organisations were able to design processes from scratch they would focus on real-time data and reporting, and better oversight of expenditure. However, there is also an increase in requiring better data security and protection as well as streamlining procurement and contract management.
Unit4 contends that the findings show a desire to prioritise measurement of the social value of services underlining the importance of digital transformation. The top ways to measure the impact of change are delivering improvements in citizen wellbeing (45 percent) and helping citizens to improve their personal circumstances (39 percent), while cost avoidance (41 percent) rounds out the top three.
