Public Sector struggles with fragmented citizen services amid push for AI, security, and cloud readiness

Public sector organisations across the UK are facing mounting challenges as they attempt to modernise citizen engagement in an era of tighter budgets, legacy IT systems, and rising expectations for AI-driven, integrated services. That’s the central finding of a new study of 401 senior decision-makers from local government, healthcare, housing and education bodies, published this month.

The report, commissioned by communications platform provider 8x8, highlights the sector’s uneven digital maturity and the urgent need to address fragmented service delivery, internal inefficiencies, and gaps in security and compliance readiness.

While citizens are increasingly using a mix of channels to contact services — including email (74%), phone (68%), and face-to-face (66%) — public bodies are struggling to manage that demand across disconnected systems. Nearly a third (31%) of organisations said their biggest internal communications challenge is staff juggling multiple platforms that don’t work together.

Live chat and social media are growing in importance, but most organisations have yet to implement unified solutions that integrate these newer channels with their traditional tools.

The report finds a strong appetite for AI integration, with 47% of organisations expecting government policy to accelerate AI adoption within three years, and nearly six in ten (59%) believing AI will be the most transformational force in public sector contact centres by 2030.

Yet despite that ambition, many organisations lack the technical infrastructure or data integration capabilities to scale AI effectively. Security and data protection remain central concerns, with a third of organisations saying the rise of AI has directly increased pressure around compliance.

Sector-Specific Struggles

The report underscores how these challenges vary by sector:

• Healthcare faces acute concerns around patient data security and pressure to integrate with other government IT systems. Transition to cloud-based services remains slow.

• Education grapples with legacy collaboration tools, inconsistent knowledge sharing, and restrictions on AI use. Email and phone remain dominant despite limited functionality.

• Local authorities cite automation resistance, poor network performance and high transformation costs as key blockers to modernisation. Cloud migration is a strategic focus.

• Housing associations are burdened by fragmented communication channels, lack of integration, and persistent reliance on insecure consumer messaging apps to engage service users.

Across the board, leaders report issues such as long wait times, citizens having to repeat information, inadequate reporting tools, and insufficient staff training — all of which contribute to poor user experience.

Lack of Tools ‘Fit for Tomorrow’

The average time to switch contact centre providers across the public sector is over 15 months, highlighting the inertia that often delays critical improvements. However, over 80% of organisations say they are planning to change or have already begun the process - suggesting a window of opportunity for reform.

When it comes to selecting new platforms, public sector organisations prioritise product functionality, reputation, and compliance expertise. With 74% reporting pressure to increase system integration across government bodies by 2030, platforms that support secure interoperability and data-driven service design are increasingly in demand.

The findings paint a picture of a public sector at a digital crossroads. Citizen expectations are growing, new technologies are becoming essential, and yet much of the infrastructure remains fragmented or outdated.

The challenge now is whether public bodies can make the leap, not just to modernise their systems, but to deliver faster, fairer, and more accessible services that truly reflect the needs of the communities they serve.