The data deficit undermining Britain’s public sector AI push

This is a guest blogpost by Matthew Houlihan, senior director of government affairs, Cisco.

The UK is racing to transform its public services for the digital age—and rightly so. The potential rewards are immense: more responsive health care, frictionless citizen services, and up to £45 billion in annual savings through smarter use of AI.

But realising that potential will depend on something far less visible than AI headlines or chatbots. The true enabler of next-generation public services is data—or more precisely, how it’s collected, connected, governed, and ultimately used to drive better outcomes and improve lives.

The stakes couldn’t be higher. Without high-quality, well-managed, and trusted data, even the most advanced tools will fall short. Right now, too much of the UK’s public sector data is trapped—locked away in outdated systems, siloed across agencies, or constrained by unclear governance and low public trust. The opportunity is there, it is just barely out of reach.

Having worked for decades alongside UK public sector leaders—from health care and education to transport and even local government—I’ve seen firsthand what drives digital progress, and what stifles it. We should meet longstanding challenges like regulatory complexity, operational constraints, and pressures to do more with less with a renewed sense of urgency and a clear, coordinated strategy for data.

And if we want to truly unlock the UK’s digital and data opportunity and unlock AI’s potential across public services, we must get five fundamentals right.

For starters, too many public services run on systems that predate even the oldest smartphones. As of early 2024, 43 critical-risk legacy IT systems remain in use across government. Even some police forces rely on legacy tech for 70% of their operations. Recognising that infrastructure is foundational to any future-facing services, these aren’t just inefficiencies—they’re liabilities.

Replacing end-of-life technology and modernising our digital infrastructure for cloud, resilience, and AI-readiness is our starting point—and should be reflected in the upcoming Spending Review.

But that alone won’t solve the challenge. People are just as important. Today, only 5% of UK civil servants are digital professionals. In the private sector, that number is far greater. High vacancy rates, pay gaps, and a reliance on contractors have left a shortage of long-term digital capability in government. This skills gap makes transformation hard to scale. Strategic workforce planning—and partnerships that support training, upskilling, and retention—will be critical to closing this gap and helping the government grow its capabilities across the board.

Then there’s trust. Confidence in how government handles data is low. Nearly half of UK citizens said concerns over privacy and security were the main barrier to embracing digital public services in one survey. In another, younger citizens were more inclined to trust private firms with their data than the government itself. If we don’t address this trust deficit through clearer policies and greater transparency, even the best, most advanced systems will struggle to gain traction.

We also need to shift how we think about data. Too often data is treated as a compliance risk rather than a strategic asset. Yet more than a third of public sector tasks could be improved through better use of digital tools and automation. That will only happen if departments can safely access and share the right data, and at the right time.  The government’s idea for a National Data Library, if well-designed, could be transformative in this effort—serving as a secure, ethical backbone for collaboration and innovation across government.

Ultimately, my experience has shown me that transformation is never delivered by one department or organisation alone. This must be a shared effort. Case studies from Greater Manchester to Birmingham show that when local government, trusted tech partners, and service leaders work together—around shared data, systems, and goals—the results are tangible. Whether that’s improved health outcomes, better mobility services, fewer missed prescriptions, or smarter city planning, partnerships can deliver real, lasting value to communities. What’s needed now is the infrastructure and motivators to replicate such collaboration at scale.

The UK has the ambition. The technology is ready. And the public is demanding more from its government services. With a new government in place, a ‘tech-enabled’ Spending Review imminent, and the National Data Library on the table as a manifesto pledge, we have a rare window to act.

Let’s use it well, move beyond pilot projects, and design a data-driven future that’s worthy of the AI era and makes its impact real. It’s what Britain deserves.