Challenges of Digital Transformation in Local Government – and Proven Solutions

5th September 2025

Digital transformation challenges are a priority for every organisation but local government faces a unique set of barriers. Councils are under pressure to deliver faster, seamless services while operating within strict budgets and outdated systems. But transformation isn't easy: Research shows three-quarters of digital transformations projects fail to generate returns above the original investment, with 70% of failures linked to poor adoption and behavioural resistance. For councils, this makes it vital to invest in digital solutions for local government that balance citizen expectations with operational realities - and deliver proven results.

In this article, we'll explore:

What is digital transformation in local government?

Digital transformation in general

Digital transformation goes beyond digitising documents. It's about rethinking how an organisation works, serves and engages. It requires cultural change, leadership commitment and citizen-first design. By redesigning processes and embracing new tools, organisations can reduce inefficiency, improve services and foster innovation.

Digital transformation in local government

For councils, digital transformation means reimagining services such as housing, waste, planning, licensing and benefits. Unlike the private sector, the focus is not profit but inclusivity, compliance and service quality. Examples include UK councils rolling out online planning applications, introducing self-service portals for housing repairs or adopting smart city initiatives such as sensors to optimise traffic and waste management.

Key aspects of digital transformation in local government

Key pillars of digital transformation in local government include:

7 challenges of digital transformation in local government

Local councils often find digitalisation harder than private sector peers due to strict budgets, legacy IT and fragmented governance structures. Below are the seven biggest government digital transformation challenges and the approaches that leading councils are taking with Netcall's Liberty platform.

1. Legacy systems and infrastructure

Older IT stacks block integration, with many councils struggling to connect citizen databases across departments. Liberty provides a way to modernise without the need for costly rip-and-replace projects, by connecting and streamlining processes across existing systems.

2. Funding and resources

Large-scale digital investments rarely fit within annual budgets, leaving projects underfunded or delayed. With Liberty, councils can start small, deliver quick wins and build momentum - reinvesting savings into larger transformation goals.

3. Cybersecurity risks

Councils are increasingly targeted by ransomware, with sensitive citizen data at risk. Netcall's platform approach ensures compliance and resilience, helping councils protect citizen data while meeting governance requirements.

4. Resistance to change

Staff fear job losses, while leadership may be risk averse. Without buy-in, even strong initiatives fail. By empowering non-technical staff to take part in building and improving services, Liberty helps position transformation as an opportunity to make work easier - not a threat.

5. Digital inclusion

Not all citizens have internet access or digital literacy, so services must remain inclusive. Liberty enables councils to offer digital-first services while still supporting assisted service options, so no one is left behind.

6. Scalability issues

Pilots may succeed but collapse under the weight of wider rollouts across multiple services. With Liberty, councils can reuse applications and templates, making it easier to expand successful pilots across more services.

7. Legal and regulatory frameworks

GDPR compliance, procurement delays and strict regulatory oversight slow transformation. Liberty solutions are designed with local government requirements in mind, helping councils move faster while remaining fully compliant.

How to overcome barriers: strategy and best practices

Addressing digital transformation challenges requires a pragmatic and inclusive strategy. Councils that succeed tend to adopt the following approaches:

Incremental approach

Instead of large-scale overhauls, councils should take a phased approach targeting specific pain points with measurable outcomes. Successful reorganisation and low-code roadmaps show that small steps deliver sustainable change.

Robust change management

Clear communication, staff training and demonstrating day-to-day benefits are essential to overcome resistance. Change should be positioned as making work easier, not replacing jobs.

Choose the right approach

Liberty includes capabilities often referred to as "low-code," which allow councils to create and adapt services quickly without heavy IT involvement. This makes it easier to:

(Based on Netcall customer implementations, 2024-25)

Case studies of digital transformation in government

Councils across the UK have proven that transformation is possible:

Want to see how your council could achieve similar results? Book a Citizen Hub demo today.

How Netcall helps local government with digital transformation

Netcall is a trusted partner for councils seeking to simplify, scale and innovate. Our Liberty Create low-code capabilitiesaccelerate transformation by enabling faster application development with fewer resources. Designed for ease of use by non-technical staff, it helps overcome budget constraints, skills shortages and siloed systems while integrating seamlessly with existing infrastructure.

With solutions built specifically for local government, Netcall empowers councils to deliver smarter services, improve citizen outcomes and future proof operations. Explore our blogs, tools and success stories to see how we can support your journey.

FAQs on digital transformation in local government