2025 Government Trends Deloitte Insights

Bonisiwe Shabane

-Nov 2, 2025, 10:35 AM

2025 government trends deloitte insights

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Gain valuable insights and practical knowledge from our specialists while earning CPE credits. Stay informed with content built for today’s business leaders. From data visualizations to expert commentary, our video content delivers concise, actionable information to help you lead with clarity in a complex world. Looking to stay on top of the latest news and trends? With MyDeloitte you'll never miss out on the information you need to lead. Simply link your email or social profile and select the newsletters and alerts that matter most to you.

Each year, I look forward to my Deloitte Insights colleagues’ release of their annual Government Trends report. And this 2025 report doesn’t disappoint, examining strategies governments across the country and globe take to modernize, reduce costs, prevent fraud and deliver more efficient services to their constituents. All told, the report identifies nine key trends shaping the future of public sector transformation and spanning a range of government functions. Three of those trends in particular stand out to me, in part because we’re seeing these up close here in the State of Ohio where the government is truly leading the way for digital... First, and probably most publicized is of course AI, which is proving to be a transformative force that can reshape government functions and services. The Deloitte report does find caveats.

AI expertise in the public sector is much less widespread than the private sector, and government leaders are often hesitant to implement AI due to perceived or real risks. Fortunately, in Ohio our state leaders are embracing these advances, pushing AI in education initiatives and, through InnovateOhio, exploring ways to utilize AI solutions as part of State and agencywide modernization efforts. As for lower-cost, higher-value government delivery, the Government Trends 2025 report cites Ohio projects, including the deployment of a suite of bots to support Medicaid, Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for... These and other tools like them today process 4,000 alerts each month, with 60% addressed within 24 hours, and keep employees in the loop by bringing complex cases to caseworkers for in-depth and engaging... The state is streamlining eligibility determinations, while caseworkers save hundreds of hours in manual tasks each month, freeing them to focus on the important and rewarding work they do every day for eligible Ohioans. Ohio is also cutting red tape and bureaucracy, as noted in this most recent report.

In fact, Deloitte supported the State of Ohio in implementing our AI-based solution, RegExplorer, to review regulatory code. The initiative led to the identification of 2 million unnecessary words and 900 redundant rules, anticipating $4 million in taxpayer savings by 2033. This is just one way governments are redesigning regulatory ecosystems to be clearer, faster and more effective, all while maintaining accountability and business and consumer trust. It was also exciting to see this Ohio project at the top of its class. General Government ServicesInformation Technology In June 2025, Ernst & Young released its Government State and Local 2025 Survey Findings, revealing that state and local IT decision-makers are under growing pressure to balance cost control with technology modernization.

For the current fiscal year, cost reduction was cited by 56% of respondents as their top priority, closely followed by cybersecurity, cited by 54%. These short-term goals reflect a reactive environment where public agencies must deliver services efficiently while safeguarding against escalating cyber threats. Yet even as agencies focus on immediate constraints, the long-term vision is clear: modernization is coming— although with significant barriers. According to the survey, just 47% of respondents rank legacy system upgrades as a current priority, but 55% expect it to be their top focus within five years. However, roughly 70% also report that it’s too expensive both to modernize legacy systems and to migrate away from them. This dual financial barrier underscores the complexity of government IT transformation: agencies can’t afford to stand still, but they also can’t afford to move forward easily.

Deloitte’s research strongly supports these findings in its Government Trends 2025 report and related articles. Like EY, Deloitte recognizes the high cost of traditional system upgrades but positions artificial intelligence (AI) as a strategic lever for accelerating modernization. Through what Deloitte calls the “Intelligent Core,” agencies can use AI to automate outdated processes, refactor legacy code, and implement intelligent overlays that avoid full replatforming—allowing them to modernize gradually and cost-effectively. Both firms also see AI as a cornerstone of future operations. EY’s survey shows that 45% of agencies currently use AI tools, while 39% have adopted generative AI—figures expected to rise to 48% and 45%, respectively, within five years. Top AI-related priorities include developing a comprehensive strategy (49%), upskilling staff (49%), and building public trust in AI applications (48%).

Deloitte’s Scaling Gen AI in Government report echoes these themes, emphasizing that successful AI implementation depends on three critical investments: strategic planning, workforce readiness, and strong governance frameworks. Without these, agencies risk implementing AI in limited pilot programs that fail to expand effectively or earn public confidence. Gen Z workers are expected to comprise more than 25% of the global workforce by 2025. Find out how the public sector agencies can attract them. Built to deliver: Nine trends advancing government’s capacity to deliver on big things. Government leaders worldwide grapple with formidable delivery challenges as they strive to bridge the chasm between lofty ambitions—be it more affordable housing, energy resilience, or economic prosperity—and the stark reality of limitations in governmental...

This challenge is not merely about executing large-scale initiatives or investing in infrastructure; it is about fundamentally transforming governance mechanisms to improve speed, effectiveness, and efficiency. In an era marked by escalating citizen expectations and the whirlwind of rapid technological advancements, often unpredictable in nature, the pressure on governments to deliver has never been more acute. This year’s Government Trends report addresses this challenge and provides a new paradigm—one that is agile, responsive, and capable of meeting the complex challenges of the modern world. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of any of each other.

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2025 Government Trends Deloitte Insights

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