U.K. Public Sector Advances Digital Transformation

Organizations in the U.K.’s public sector are partnering with leading service and solution providers to accelerate innovation and service delivery as part of wide-ranging modernization strategies, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens Public Sector Services and Solutions report for the U.K. finds that both central and local government bodies are pursuing agile digital development while upgrading legacy systems and strengthening compliance and security. Despite ongoing advancements, digital maturity remains low due to factors such as persistent skills shortages, outdated infrastructure and limited budgets. Public dissatisfaction with services remains high, with productivity still below pre-pandemic levels and most citizens believing services are underfunded.

“Facing demands for greater responsiveness, public sector organizations plan to increase their budgets for transformation enabled by third-party services,” said Matthew Hannon, U.K. Public Sector lead, ISG. “The U.K. government’s digital road map is leading to deeper engagement with IT, consulting and cloud service leaders.”

Government organizations in the U.K. are expanding user-centric online platforms and improving interoperability across departments for better transparency and service delivery, ISG says. Simultaneously, they are integrating AI and advanced analytics to streamline operations, enhance decision-making and improve citizen experience. Agencies seek providers with expertise in deploying GenAI, automation and data integration solutions that can guide them through structured transformations and help them enhance productivity.

Moving from legacy software to cloud services is central to the public sector’s efforts to increase resilience and scalability, the report says. Agencies are partnering with service providers to orchestrate cloud migrations, manage hybrid environments and ensure compliance with strict security and governance standards. These efforts often require replacing outdated software to cut costs, improve interoperability and deploy citizen-facing applications faster.

With cyberattacks growing threefold in the U.K., public sector organizations are prioritizing risk management, ISG says. They are also implementing continuous threat monitoring and improving incident response capabilities. However, limited funds, persistent pay gaps and the difficulty of employing highly talented professionals continue to constrain security efforts. In response, agencies are seeking assistance in adopting secure digital platforms and structuring transformation for measurable outcomes.