2025 UK Public Sector Survey: Digital Transformation Still Failing to Deliver

“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?

Despite slow progress, UK Public Sector organisations are not giving up on digital transformation and still believe in its value. Most survey respondents (89%) remain positive about the future of the Public Sector and 74% expect to complete their change strategies in two years versus to 49% in 2023. 85% say connected backoffice systems and shared data will have a positive impact and 40% 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% (2025) vs 28% (2023) – impacting services and targets
• A quarter say they are majorly impacted by ongoing challenges from the Covid 19 legacy
• Changing priorities (41%) and leadership resistance to transformation (37%) 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 – 31% (2025); 24% (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% (2025); 15% (2023). More encouragingly, there is less emphasis on making cuts to citizen services in this year’s report cited by 30% compared to 37% in 2023. Short-term, there will also be a focus on improving reporting capabilities and the integration of backoffice systems, as well as achieving greater value for money.

Clearly, the responses in this year’s study suggest significant ambition in the Public Sector to improve digital transformation. 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. Ultimately, 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%) and helping citizens to improve their personal circumstances (39%), while cost avoidance (41%) rounds out the top three.

Methodology

Vanson Bourne surveyed 400 Public Sector decision makers across Finance, IT, HR, compliance, audit, governance, strategy, corporate and operations functions. The survey took place between April and May 2025 and surveyed respondents in Canada, Netherlands, Sweden and the UK. They were also drawn from a variety of public sector bodies, including central government, healthcare, state or provincial government and non-departmental government bodies. In the UK, there were 100 respondents.

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About Unit4

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