Financial strain across the public sector is reaching crisis levels, with senior leaders warning it has become a daily reality for frontline services, according to new research from GovTech firm Civica.
A survey of 607 senior leaders spanning local and central government, healthcare and education found that three quarters describe the financial pressure facing their organisation as substantial, severe or critical — conditions that would have been considered exceptional just two years ago. One in five cited staff wellbeing and morale as the area most affected.
Despite significant investment in digital and AI programmes, effectiveness remains limited. Just 4% say their digital tools are highly effective, while 17% have deployed none or only limited tools — rising to 28% in education. Nearly a quarter of leaders admit they cannot measure the impact of their digital investments, undermining the case for further funding.
Readiness for AI is similarly low. Only 3% of organisations say they are fully prepared to scale digital solutions without reducing service quality, while 71% report medium or low confidence in their data quality and governance. Funding remains the leading barrier to digital progress, followed by skills, data and infrastructure challenges.
