January 14, 2025

Five predictions for how the public sector will tackle challenges and lead digital transformation in 2025

The UK government is committed to modernising and becoming tech-first, but widespread skills shortages and legacy IT systems within the public sector remain an obstacle to digital transformation. While we are seeing steps to digitise, and the £2bn set aside to improve IT across the NHS is a good case in point, capital investment is only one part of the puzzle. As we look to the new year, we can expect the public sector to continue to face challenges in keeping pace with technology innovation, particularly in adopting AI and cloud solutions, combating talent gaps, and modernising workflows.

Without faster integration of technology, the public sector risks falling behind on mission-critical objectives. The gap between what’s possible and what’s feasible within the public sector could become more pronounced, impacting everything from service delivery to operational efficiency.

Success in the public sector hinges on embracing innovation, continuous learning, and leadership-driven experimentation to remove red tape and empower employees. Below, I dive into the five key trends I believe will lead to digital transformation in the sector in 2025.

AI will have a major impact on operations

In 2025, the public sector will add more AI-skilled employees to their teams. By integrating tools like Generative AI into daily workflows, repetitive tasks will be shifted onto AI platforms, allowing employees to focus on more meaningful work. This shift will lead to increased efficiency, as well as a more engaged workforce. Freed from manual tasks, employees will be able to dedicate more time to complex problem-solving, creative decision-making, and mission-critical projects.

The benefits of this transformation will be felt across three key areas. First, the public sector will experience faster operations and reduced bottlenecks, as AI tools handle high-volume tasks like data processing, document analysis, and information retrieval. Second, public engagement will become more responsive and personalised, with AI assisting in real-time communication, tailored responses, and proactive service delivery. Lastly, the work itself will become more engaging, fostering greater job satisfaction among public sector employees as they shift from task execution to more strategic, impactful roles.

However, the success of these efforts will hinge on how well AI is integrated “on the ground.” Those departments that invest in hands-on training and prioritise the practical application of AI in everyday scenarios will see the greatest outcomes.

The right skills will be key to cloud transformation

Cloud transformation will also be vital for public sector modernisation and digital transformation, and the most important step the public sector can take to ensure smooth cloud transformations is to start with upskilling and hands-on training. According to Pluralsight’s State of Cloud report, while 75% of tech leaders are building new products in the cloud, only 8% of technologists have extensive cloud experience?. This gap emphasises the urgency for the public sector to prioritise internal talent development, as hiring alone won’t meet the demand.

Departments should build a cloud-first culture by embedding cloud skills into technologists’ everyday workflows. This involves providing continuous learning opportunities, with hands-on labs and sandbox environments where employees can safely explore cloud tools in real-world scenarios. Security training is particularly critical, given that human error remains the leading cause of breaches during cloud adoption.

Microlearning will emerge as critical to keeping pace with tech evolution

As technology continues to intersect and evolve rapidly, the public sector will also need to focus on just-in-time microlearning, enabling employees to quickly build skills that align with immediate mission needs. This approach becomes especially critical as Generative AI, which is a convergence force multiplier, integrates with other technologies like cloud and cybersecurity.

By increasing the focus on AI-driven skill assessments and curated learning paths that directly address the most relevant skill gaps, the sector will be able to develop expert generalists with a broad base of capabilities. This approach ensures that upskilling is anticipatory, preparing employees to fully take advantage of this power of convergence.

Leaders will prioritise experimentation over rigidity

Resistance to change in the public sector is often driven by leadership’s focus on protocol adherence and risk mitigation over innovation. This mindset can unintentionally discourage new ideas, as team members learn that compliance and approvals are the safest paths forward, making meaningful change feel distant and unlikely.

However, the impact of this resistance can be avoided if leaders actively champion, change and create environments where experimentation is encouraged within clear, defined boundaries. By empowering employees to test ideas, iterate, and provide feedback, leaders can shift the culture from one that’s centered on avoiding risk to one that’s focused on progress.

Taking a more agile and transparent approach is crucial. When leaders prioritise agility and openly communicate their commitment to innovation, it sends a clear message that change is not only possible but also supported.

Public sector should focus on creativity to navigate “red tape”

Bureaucratic ‘red tape’ is a barrier to progress in the public sector. Protocols and regulations are there for good reasons, like ensuring accountability and safeguarding public resources, but they can also make it frustratingly slow to adapt and innovate. This can be especially challenging for public sector employees, who often feel like their hands are tied even when they have good ideas for improvement.

Compared to the private sector, which often has the flexibility to fast-track decisions and try new approaches, government teams face more rigid processes. It’s not that public sector workers lack the will or the creativity; it’s that the layers of approvals can make even small changes feel insurmountable.

When leaders focus on simplifying processes, making decision-making more transparent, and actively encouraging employees to suggest improvements, it can make a huge difference. Employees who feel heard and empowered are more likely to take ownership of solutions and drive progress, even within the constraints of government.

The truth is, finding a balance between maintaining necessary safeguards and fostering innovation requires leaders who are willing to champion change and embrace a more agile mindset. By mitigating needless red tape, we can make the public sector more dynamic, adaptable, and most importantly, more fulfilling for the people working in it.