18th May 2026
New research into the tensions between financial pressures and digital readiness
Civica, a global GovTech champion supporting the needs of citizens and those that serve them every day, today launches its first‑of‑its‑kind public sector‑wide research report “Public sector financial resilience”.
Produced in partnership with Total Research, the report examines financial resilience across central and local government, health and care, and education. Based on insights from 607 senior public sector professionals, it measures financial pressure, evaluates the effectiveness of digital tools and assesses readiness for AI and data‑led transformation.
The findings show a sector under acute and sustained strain. Three quarters (75%) of respondents describe the financial pressure on their organisation as substantial, severe or critical. Conditions that would have been considered exceptional just two years ago are now routine, with financial strain becoming a daily reality for frontline services. The human impact is stark, with one in five citing staff wellbeing and morale as the most affected area. The report warns that transformation cannot be delivered by people who are already running on empty.
Despite significant investment in digital and AI programmes, adoption and effectiveness remain limited. Just 4% say their digital tools are highly effective, while 17% have deployed none or only limited tools, increasing to 28% in the education sector. Nearly a quarter of leaders say they do not know how effective their digital investments are, weakening the case for further funding and smarter deployment.
The report also highlights low readiness for AI across the public sector. Only 3% of organisations say they are fully ready to scale digital solutions without reducing service quality, while 71% report medium or low confidence in their data quality and governance. Funding is the leading barrier to digital progress, followed by skills, data and infrastructure challenges.
Lee Perkins, CEO of Civica, said, “Financial resilience is no longer a future risk. It is the defining challenge facing the public sector today. Without it, the ability to deliver quality services and value for citizens and to support communities quickly erodes. Our research shows pressure mounting on staff as digital ambition outpaces readiness. Technology, including AI, can help relieve that strain, but only when it is built on strong foundations including data, skills, integration and leadership confidence.”
With devolution, public sector reform and AI ambition reshaping public services, the report calls for a more unified and strategic approach to building long-term financial resilience. It concludes with practical recommendations focused on strengthening digital foundations, measuring impact, enabling collaboration and engaging the workforce in transformation.
Download the full report for detailed insights, sector analysis and recommendations.
About Civica
Civica is a global GovTech champion, focused on developing critical cloud-based software and services that are integral to the everyday lives of citizens around the world. From central and local government to education, health and care, more than 6,000 customers trust and partner with Civica, using our software to deliver critical services to more than 100 million citizens. With operations in seven countries across North America, Europe and APAC and 25 years of experience, we’re passionate about supporting the needs of citizens and those that serve them every day. Find out more: www.civica.com