Will generative AI transform the Public Sector in the next five years?
17th September, 2025
In August 2025, the government rolled out new artificial intelligence programmes across government departments as it moved towards using generative AI to "kickstart an era of economic growth, transform how we deliver public services, and boost living standards for working people across the country".
In this article, Ward Hadaway‘s Public Funding Partner Alexander Rose assesses the likelihood that AI will transform the way the UK’s public sector operates within the next five years.
What is generative AI?
Generative Artificial Intelligence systems learn patterns from data sets and can thereafter use this information to create their own content such as text, images, video, audio or software code in response to a user’s prompt or request. This technology is undeniably exciting given its potential to be used to develop prototypes, compose music and write software code. For example in August 2025, the BBC reported that generative AI had been used to design a new antibiotic to tackle the MRSA super-bug.
How is the government looking to use generative AI within the public sector?
Sir Kier Starmer’s government is championing the use of AI. The Prime Minister has pledged to make Britain “the world leader” in artificial intelligence and to achieve this has appointed high profile tech entrepreneur, Matt Clifford CBE to lead upon the development of the national AI Opportunities Action Plan. Published in January 2025, this Action Plan sets out 50 recommendations for the UK to seize the opportunities which come with AI, including ways to use AI to improve the delivery of public services.
One of the main recommendations made in the Action Plan is that the public sector “should rapidly pilot and scale AI products and services and encourage the private sector to do the same”. Examples of the benefits that this can bring are listed within the Acton Plan include using AI assistants to do repetitive tasks better and faster, for example helping teachers cut down the 15+ hours a week spent on lesson planning and marking, as well as improving the assessment of chest x-rays and CT scans, enabling faster diagnosis of lung cancer. When AI is used, it is recommended that the public sector adopts a “Scan > Pilot > Scale” approach. This involves identifying areas where AI might be able to drive improvements, undertaking rapid prototyping and where this is successful, rolling the prototype out to other parts of the public sector. Where there are success stories it is recommended that these are shared through a single “AI Knowledge Hub” open to all.
Clearly there are concerns around how generative AI may develop in the future. With this in mind, the government has also published an Artificial Intelligence Playbook for the UK Government. This lists the government’s principles when it comes to AI, including to use AI “lawfully, ethically and responsibly”.
What is the Prime Minister’s AI Exemplars programme?
In August 2025 the government launched a series of prototype AI products for use across government departments, including in regard to justice and education, as well as in the NHS. Overseen by the Government Digital Service, the design of the AI Exemplars programme was deliberately built around the “Scan > Pilot > Scale” model with steps taken to continuously monitor the technology in order to “move fast and learn things”. The interventions fall within three structures – department owned AI models, cross-government models and those developed through collaboration with industry. This latter category needs to be handled with particular care, because in certain circumstances, access to government owned data sets can give rise to Subsidy Control and data protection issues.
Will the Public Sector be transformed by AI?
AI technology is developing rapidly, but that doesn’t always translate into delivering meaningful changes for users. For example, within the private sector, MIT research has found that only 5% of AI investment has produced identifiable returns.
Contrary to the common perception, AI is rarely a particularly effective “off the shelf” product – instead it works best when trained against the information of the user (or those in very similar circumstances) so that the programme can learn from how issues have been approached in the past. What this means for the public sector is that AI products will need to be developed to meet the particular needs, drawing upon existing data sets (and thereafter refining these tools to reflect best practice). A significant barrier to this is identified within the UK Parliament Public Accounts Committee’s ‘Use of AI in Government’ report, published in March 2025, which states that approximately 28% of public sector data sets are unusable for the purposes of training AI because they are recorded upon “poor quality” media or “locked away in out-of-date ‘legacy’ IT systems”. A secondary issue is workplace culture – in September 2025, it was reported that nearly half of civil servants doubt they will receive enough training to make effective use of artificial intelligence in their jobs.
Despite these teething issues, it seems likely that the work of those employed within the public sector will change as a result of AI within the next five years. There are two main reasons for this. The first is that there is consensus amongst politicians to use this new technology because of the efficiency savings it can deliver. In 2025, more than 20,000 Civil Servants participated in a three month trial using Microsoft’s Co-Pilot AI assistant – those that used the technology to draft documents, summarise meetings and prepare reports on average saved 26 minutes a day by using the tool. Indeed, Sir Kier Starmer has claimed that “there are up to £45 billion worth of savings and productivity benefits, ready to be realised” by better deploying AI across government. The second reason is engagement, in the same civil service trial 82% of participants reported that they wished to continue using the technology. It appears that people who engage with AI tend to like working with the technology because it makes repetitive tasks easier.
Conclusion
Generative AI will change the way people working within the Public Sector do their jobs, just as it will change working life for those in the private sector and third sector. In time, it can be expected that AI will become as essential to public, private and third sector organisations as email or the internet. However the speed of that transition depends upon the products created and the willingness of staff to embrace the new technology. These are issues which can be controlled, public sector bodies can embrace the new technology, using their data sets to develop products, and training staff so that they have the confidence to make the most of the opportunities that come with generative AI.
If you would like to discuss any of this further, please get in touch with Alexander Rose.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.
