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Report 28 Jan 2026

Public Sector - InSight Analysis - UK

The UK public sector has entered into a new cycle of transformation under the Labour Government, which is driving a wave of modernization across critical areas including health and social care, immigration, justice and defence.

In all these areas, the aim is to improve the way that departments and agencies harness the potential of data that is generated from back-office operations through to citizen interaction, in order to unlock new levels of efficiency and enhance service delivery.

The sector will continue to be one of the fastest-growing sectors in terms of software and IT services expenditure as a result of multi-year strategy programmes in healthcare and defence, and increasing appetite for data management, analytics, automation and artificial intelligence tools and platforms.

At the same time, the public sector is looking to move on from legacy sourcing relationships in order to accelerate the pace of applications and business process modernization. Vendors that can adapt to this shift, while helping buyers to maximize the potential of emerging technologies relating to areas such as AI in a low-risk, secure way, will be the most successful in this segment.

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Nick Mayes

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