The UK public sector is facing a barrage of demands to increase use of AI, improve remote working options, and toughen security while dealing with challenging budgets and desires for improved stakeholder and citizen experiences.

That’s the findings of a new report from analysts Cavell Group and 8×8, Inc. (NASDAQ: EGHT), the industry’s most integrated platform provider for CX that combines Contact Center, Unified Communication, and Communication APIs.

The 2025 UK Public Sector CX Report lays bare the glaring gaps in digital maturity, strategy, and frontline service capabilities across local government, housing, healthcare, and education.

Highlighting the fragmented state of citizen engagement, the report shows common pain points but also the capabilities needed to define who thrives and who fails in the next wave of public sector transformation.

“More than 80% of respondents are currently changing or intending to change their contact center provider in the next two years,” said Jamie Snaddon, EMEA managing director at 8×8, Inc. “That means there’s a chance to deliver a better future for public engagement for the majority – but the clock is ticking.”

The research uncovered several trends that consistently affect all four sectors surveyed.

Despite digital advances, email (74%), phone (68%), and face-to-face (66%) remain the top contact channels. Social media (52%) and live chat portals (45%) are gaining traction.

Three in ten (31%) of all organisations said their biggest internal communication challenge is that staff are using multiple, disconnected platforms. Integrated, all-in-one solutions remain the exception rather than the norm.

About half (47%) of companies surveyed expect policies to encourage more AI usage within three years. Meanwhile, three quarters (74%) have been tasked with increasing integration with other government bodies by 2030.

A third (33%) said AI has forced an increased focus on data protection, with a renewed focus on security and compliance.

Metrics have also evolved, with organisations rethinking success, moving beyond traditional metrics to more outcome-based, real-time analytics by 2030.

Public sector leaders also highlighted core operational issues with external communication, including long customer wait times, customers having to repeat themselves, call quality issues, and insufficient data reporting and training tools.

“Public sector organisations are telling us they’re at a critical turning point,” said Joe McStravick, vice president, EMEA Sales at 8×8, Inc. “There’s a clear appetite to improve citizen services as expectations around AI, data, and omnichannel engagement delivery increase. But for many, delivery of the tools, and training on their use, is not keeping pace – and that’s often down to budgets.”

Challenges by Sector

In healthcare, top concerns revolve around data security, increased patient expectations, and evolving regulations. The sector is also under growing pressure to improve integration with other government IT systems and increase the move to cloud.

For education, challenges include outdated collaboration tools, lack of shared knowledge systems, concersn over student data security, and bans on AI usage. Legacy communication channels such as emails and phone are still heavily in use as well.

In local government, digital transformation costs, poor network quality, and resistance to automation were cited as kye issues. The priority for many is transitioning to cloud-based contact centres.

Housing associations noted pain points in fragmented communication channels, lack of integration with other relevant services, a dispersed frontline workforce, and concerns around platform and system migrations. Security of customer data also remains a major focus, with many associations still relying on consumer messaging apps to maintain contact.

“While there is no shortage of ambition, the reality is that fragmentation, outdated technology, and security concerns are still widespread,” said Finbarr Begley, senior analyst at Cavell.

“The issue is budget, which means the path forward will demand strategic focus, better vendor partnerships, and a renewed investment in people and training. With the right platforms and policies, public sector organisations can not only meet rising expectations – they can exceed them, creating smarter, faster, and fairer services.”

With 59% of public sector leaders saying AI will be the most transformational factor in contact centers by 2030, the research shows that most organisations are still early in their AI journey.

While there is a focus on improving call routing, training, proactive citizen engagement, and self-service, many lack the infrastructure or insights to scale effectively.

Equally, concerns over security, cloud transition risks, and regulatory obligations influence buying decisions.

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