But with Whitehall pushing a local government devolution agenda, fresh opportunities for local authorities to pick up the pace of their cloud migration plans could emerge as a result.

“Local government has historically lagged on cloud adoption, often due to aging infrastructure, complex estates and risk-averse procurement,” says James Wickham, founder and director of IT transformation consultancy JPW Digital Services, who has been supporting councils across the UK to modernise their IT infrastructure for more than 20 years. “But the devolution agenda, combined with the trend towards local authority mergers, could shift that dynamic.”

As detailed in the December 2024 English devolution whitepaper, the government wants to rationalise the number of local councils in England through the abolishment of two-tier local authority setups.

This would result in county councils merging with their district council counterparts to create “strategic authorities” whose mayors will be empowered to run their own budgets and large portions of their local economies without ministerial interference.

The whitepaper describes the move as the “biggest transfer of power out of Westminster to England’s regions this century” and will bring an end to the “parent-child dynamic” that exists between central and local government entities, adding: “We will reset the relationship with local government to give the sector more autonomy and put councils on the road to recovery.”

Working to a cost reduction agenda

Doing more with less is a business strategy followed by the majority of local UK councils in the face of tight budgets and the ever-growing demands of the citizens they serve.

According to the Local Government Association (LGA), local council finances are “under strain like never before” as their budgets are being pressured by “spiking inflation, high energy costs and increase to the National Living Wage”.

The knock-on impact is that the cost of delivering council services has risen by £15bn between now and the 2021/2022 financial year, the LGA claims, adding: “[That equates to] 27% [in] real terms cut in core spending power since 2010, leaving council the resilience they need to meet new challenges.

“Councils constantly work to protect their budgets, working with and learning from each other to share and transform services to ensure they can deliver high-quality services for residents, but there aren’t any more easy savings to be found.”  

The government’s devolution drive acknowledges this, with the English devolution whitepaper confirming that a shake-up of how local authorities are funded will form part of the changes it is seeking to introduce.

“We will provide multi-year settlements, updating the way we provide funding to local government, end micro-management and move to a meaningful partnership between central and local government,” the whitepaper continued. “We will rebuild local authority workforces and modernise how councils do business.”

And this is work that could stand to have a transformational impact on how local councils operate, as well as their IT investment strategies, says Wickham: “In my experience, giving local authorities greater autonomy over budgets and service models often unlocks a more strategic view of IT investment.

“When that autonomy includes a clear digital remit, we see more appetite for cloud and platform-based delivery – not just as a cost-saving measure, but to genuinely reimagine how services are delivered.”

Progressing the devolution

Several months after the whitepaper’s publication, the government announced in early February 2025 that 19 councils had joined its Devolution Priority Programme to create strategic authorities spanning six areas.

These areas include Cumbria, Cheshire and Warrington, Greater Essex, Hampshire and Solent, Norfolk and Suffolk, as well as Sussex and Brighton. This means all six of these areas are on course to become mayor-led strategic authorities by May 2026.

On the same day, the government confirmed legislation had passed, paving the way for two new mayoral authorities to be formed in Greater Lincolnshire and Hull, and East Yorkshire. As well as the formation of combined county authorities in Devon and Torbay, and Lancashire.

Speaking to Computer Weekly, Gavin Sneddon, principal analyst for local government at IT market watcher GlobalData, says all this consolidation could help to provide a more accurate picture of cloud adoption trends in local government.

“The devolution process will require a review and consolidation of the relevant technological stacks which could have significant implications for future cloud adoption,” he says. “I would also be using [the devolution process] to get a greater understanding of what the current digital estate is across the whole local government.”

This is because, as things stand, it is very difficult to get a complete and granular understanding of just how much cloud use is happening within local government.

The main source of readily available public sector cloud spending data is the Digital Marketplace portal, which tracks what public sector bodies have spent procuring cloud through the G-Cloud framework agreement.

But that is far from the only framework that local government bodies can procure cloud services through. So, while The Digital Marketplace might be useful to get a steer on more general cloud usage trends in the public sector, its data should not be relied on in isolation to accurately assess how advanced cloud adoption is in local government.

“It is not a straightforward process to measure precisely the current rate of cloud adoption at local government level,” adds Sneddon.

For example, the Digital Marketplace data states that local government cloud spend hit £160m during the 2020-2021 financial year, which is spread across cloud hosting, software and support services. Meanwhile, GlobalData’s own figures suggests local authorities spent £163m on cloud hosting alone that same financial year, highlighting how much local government spend is unaccounted for through G-Cloud.

 It is also worth noting the local government segment in the Digital Marketplace includes Transport for London’s cloud spend, which amounted to £12.7m, while Sneddon’s figures do not.

“Local government spending on cloud hosting increased exponentially – for all local authority types – from 2016/17 until 2021/22,” he says, with figures having increased from £47m in 2016-2017 to £163m in 2021-2022, based on GlobalData’s information. “It’s almost tripled, so it’s clear that it’s not a case that nothing has been happening in local government [or that] they’ve been dragging their feet while central government just gets on with it.”

Over the same period, the amount spent by local government bodies on cloud-based applications increased from £2.5m in 2016-2017 to £8.5m in 2021-22.

What is notable, continues Sneddon, is that the amount spent on cloud hosting and cloud applications for the 2023-2024 financial year has remained flat compared to the 2021-2022 figures.

“It is possible that local government has over the years harvested much of the low-hanging fruit from its cloud migrations and is now left with the more challenging use cases, which is why spending is comparatively flat,” he says.

Dominic Edwards, technology strategy lead at IT consultancy Slalom Consulting, works with local authorities on digital transformation projects. He says yhat, in his experience, many authorities’ forays into cloud have focused on “lifting and shifting” their email, document management and web hosting services off-premise.

“Others have opted for hybrid models, retaining critical or legacy systems on-premise while deploying new services in public or private cloud environments,” he says. “A strong emphasis on citizen-facing services has also shaped many projects, with online portals now commonly used in areas like planning applications, social services and waste management.”

There is also a growing movement within local government towards adopting software-as-a-service (SaaS) customer relationship management and data analytics tools to improve citizen engagement and service delivery, he adds.

“Councils are increasingly turning to cloud platforms for the robust capabilities they offer, from autoscaling and AI-enabled threat detection to geo-redundancy and secure data storage, all to ensure their services remain secure and reliable in the face of evolving risks,” says Edwards.

In his view, local government cloud adoption remains steady but uneven, with some embarking on far more complex deployments than others: “While some urban councils, such as several London boroughs and Manchester City Council, are well advanced in their cloud journeys, many smaller or rural councils are still at a relatively early stage.”

But that picture could be set to change now the government’s devolution drive is underway, claims Sneddon, adding: “In the medium to long term, I think there are going to be a lot of opportunities [for new cloud spend] because councils will need to consolidate.”

This could also lead to a situation where councils a bit further behind on cloud end up merging with other authorities who are more advanced, he adds.  

In the meantime, though, Sneddon says it is likely that spending on cloud services in local government will remain flat for a while, given the government is targeting a May 2026 completion date for the formation of the first wave of its newly formed strategic authorities.

“The district councils are not going to want to spend anything because many of them won’t even be sure whether they’ll exist in a year or two, so that’s going to be a negative cross-wind,” says Sneddon.

Speaking to Computer Weekly, Kevin Millard, product manager of local authority-focused housing needs IT services provider Huume, is also of the view that the pace of cloud adoption is not going to change overnight due to business culture factors.

“Councils don’t like change,” says Millard. “Not a lot of organisations do, but councils seem to be on a slightly different level of risk averse. They obviously have a lot of levels of control and sign-off, which doesn’t always help.”

The devolution agenda is effectively setting in motion a series of mergers in local government, and each of these individual councils will have their own ways of working and different levels of bureaucracy, he says.

“You also get some councils that are quite forward-thinking, whereas others don’t necessarily want to look at doing things differently – or are not ready to do things differently. The amount of staff they have can vary dramatically too,” says Millard.

Huume was founded six years ago by director Paul King. It specialises in the provision of a SaaS property portal to local authorities and housing associations that allows those in need of social housing to find accommodation locally that is right for them.

Both King and Millard previously worked at a housing needs IT services provider that got acquired by Civica. In their time working with local government, they have seen the difficulties councils can face when merging into unitary authorities.

“You might get groups of councils that are geographically close that are going to become one, but their individual processes can be vastly different,” Millard says.

Smoothing out the differences between the separate entities being combined to form one single council can take years. As an example, Millard cites the two-year transformation of Dorset Council into a unitary authority, made up of nearly half a dozen district councils, which concluded in 2019.

“We worked with Dorset Council, and they had become a unitary after merging with multiple district councils, but all of those districts worked very differently, and it did take them a while to get to that point where they had a common working process,” he says.

“From the perspective of the work we do, it’s a case of trying to pick up the nuances from each area, because some might have a younger population or a more elderly population, and populations change over time too. It’s quite amazing how different certain authorities can be from one area to the next.”

Local government supplier lock-in

The issue of supplier lock-in is a real challenge in local government, King says. Some of this is due to councils having a low appetite for trying out new suppliers. Sometimes, though, it is down to legacy suppliers not being transparent on how long it will take councils to exit their platforms.

“We come up quite often against where a council will have an existing piece of software in place that might be coming up to the end of its contract a year’s time, for example, and they want a change, but it just takes so long to do,” he says.

“Then they get too close to the contract end-point that they have to extend for another year because the existing suppliers won’t give them a three-month extension. It has to be another year, and then the whole [discussion] process just gets reset. Some councils are also struggling with the day-to-day and do not have the capacity or budget to put a team together to lead a change project.”

Once the government’s devolution drive has a chance to bed in, and local authorities acquire greater autonomy over how to use their budgets, it is hoped that issues such as these will become a thing of the past.

Beyond cloud, these changes could unlock other forms of technology spend and innovation, with the devolution whitepaper talking about how the initiative could release the “untapped” potential for innovation across the UK.

Luke Percy, government and healthcare sector manager at Conscia-owned digital transformation company ITGL, agrees, telling Computer Weekly the devolution of budget control to local councils represents a “significant opportunity to unlock regional innovation” and deliver services locally that better serve communities.

“This decentralised approach empowers councils to invest in scalable cloud infrastructure and smart technologies that respond directly to local priorities – be it improving digital access in rural areas, supporting integrated health and social care systems, or enhancing public safety,” he says.

 “Government support, alongside targeted investment in digital skills and infrastructure, is essential to help councils realise their digital strategies, and we’re already working with several authorities [using] cloud platforms to modernise legacy systems and provide access to more secure, resilient and efficient services.”

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