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 Councils are under pressure to deliver faster, seamless services while operating within strict budgets and outdated systems.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:
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Shifting from analogue to digital – for example replacing paper applications with online forms and e-signatures
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Rethinking workflows – redesigning processes rather than simply replicating paper online
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Improving citizen experience – creating intuitive, mobile-first platforms that reduce waiting times
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Enhancing efficiency – using automation such as AI and RPA to cut repetitive tasks
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Data-driven decision-making – using analytics for better planning and forecasting
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Transparency and accountability – dashboards and open data portals that build public trust
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:
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Empower staff – enabling non-technical teams to improve services and respond to resident needs
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Modernise existing systems – connecting legacy infrastructure into a single, cohesive platform
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Break down silos – creating a unified view of citizens across services
“Digital transformation in local government works best when councils have the tools to innovate quickly and safely. Low-code solutions empower teams to respond to citizen needs without being held back by skills shortages or legacy IT.”
Mark Gannon
Director of Client Solutions, Netcall
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Councils using Citizen Hub, built in Liberty Create, have reduced citizen call volumes by up to 40% through digital self-service – giving residents faster answers while easing pressure on frontline staff.
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Applications built with low-code were delivered 4x faster than traditional IT projects – helping councils adapt quickly without long IT delays.
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One UK council saved £250k annually by consolidating multiple legacy systems into a single digital platform – freeing up budget to reinvest into frontline services.
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Citizen satisfaction scores improved by 30% following the rollout of AI-assisted customer contact – showing the real-world impact of Liberty on resident experience.
(Based on Netcall customer implementations, 2024–25)
Case studies of digital transformation in government
Councils across the UK have proven that transformation is possible:
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Tewkesbury Borough Council used AI-driven automation to improve citizen engagement, reducing call volumes and cutting response times. Read more here.
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Croydon Council broke free from legacy systems by adopting low-code applications, enabling digital independence and delivering new services faster. Read more here.
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Newcastle City Council, a metropolitan district and unitary authority, has demonstrated how large councils can achieve efficiency gains at scale. By consolidating technology, streamlining processes and enabling more digital self-service, Newcastle delivered significant cost savings while improving services for citizens. Read more here.
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 capabilities accelerate 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
What is the biggest barrier to digital transformation in councils?
The most significant barrier is legacy IT systems that block integration and increase costs.
How can local authorities afford digital transformation?
A phased approach using low-code capabilities allows councils to start small, deliver quick wins and scale gradually.
What role does low-code play in overcoming digital transformation challenges?
Low-code empowers non-technical staff to create solutions, bridges the IT skills gap and integrates old systems into modern citizen-facing services.
Is digital transformation inclusive for all citizens?
Yes, successful transformation prioritises accessibility and offers alternatives for residents who lack digital skills or internet access.
What quick wins should a council target first?
Start with one high-volume journey, for example missed bins or housing repairs. Replace paper or phone steps with a self-service flow, add status updates and measure deflection.
What KPIs prove success for digital transformation in local government?
Task completion rate, time to complete, channel shift, cost per transaction, citizen satisfaction and staff rework rate.