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A report published late last month by the Public Accounts Committee (PAC) has revealed that the UK government risks missing out on the potential benefits of AI for the public sector due to dated IT systems, poor data quality, and a clear digital skills gap.
The report specifically highlighted five areas of improvement that are needed:
- Legacy technology and poor data are blocking AI progress
Outdated government IT systems using siloed data are major obstacles to AI adoption in the public sector. Despite being flagged as high-risk, nearly a third of the government’s legacy systems still lack funding for upgrades, at the time of the report.
The PAC is urging the Department for Science, Innovation and Technology (DSIT) to publish a detailed plan within six months on how it will prioritise and fund upgrades for the most critical legacy systems, and to track progress more transparently.
- Lack of transparency undermines public trust in AI
Secondly, the transparency around AI use in the public sector is minimal, therefore eroding public trust. Government bodies are not publishing enough information about how algorithms are used in decision-making.
“As of January 2025, only 33 records had been published on the government website set up to provide greater transparency on algorithm–assisted decision making in the public sector,” the report read.
Without clear standards and more transparent reporting, the public may lose confidence in government AI initiatives.
- The digital skills gap still remains a barrier
Recruiting and retaining digitally skilled professionals in the public sector continues to be a major issue in AI implementation. The report found that over 70% of departments reported difficulty sourcing AI talent, partly because of large pay disparities with the private sector making the civil service less competitive. Current reforms may not be sufficient to close the gap.
- Legacy tech hindering UK’s AI drive
Many government departments are piloting the use of AI tools, ranging from natural language processing to image recognition. But despite these projects, there is little evidence that these tools are being rolled out more widely.
One major issue is the lack of a centralised process for combining insights from these pilots and sharing results between departments. Without this more holistic approach, promising innovations risk being overlooked, duplicated, or confined to isolated teams.
DSIT has acknowledged the gap and is trialling an AI Knowledge Hub to improve collaboration, but real progress will depend on stronger leadership and a more coordinated strategy.
- AI procurement needs to re-strategise
The AI market dominated by a small number of large technology suppliers; as such, PAC has raised concerns about competition, innovation, and vendor lock-in. In response, DSIT has committed to developing a dedicated AI sourcing and procurement framework and establishing a digital commercial centre of excellence to ensure better value and broader supplier access.
“We want to make sure that the AI industry has a government that is on its side, one that will not sit back and let opportunities slip through its fingers. In a world of fierce competition, we cannot stand by,” the report concluded.
In response to the report, a government spokesperson said that “these findings reflect much of what we already know, which is why we set out a bold plan to overhaul the use of tech and AI across the public sector – from doubling the number of tech experts across Whitehall, to making reforms to replace legacy IT systems more quickly and building new tools to transform how people interact with the state.”
The Committee has set a six-month timeline for DSIT and the Cabinet Office to report back on progress in key areas, including legacy tech upgrades, transparency compliance, and digital talent reforms. A detailed Digital and AI Roadmap is expected later this year.
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