Centralised vs decentralised government digital infrastructure: which is better for the public sector?

Digital Team
Jul 26
4 min read

Centralised vs Decentralised Government Digital Infrastructure: Benefits for the Public Sector

Governments across the world are rethinking how they build and manage digital infrastructure. At the heart of this debate is the choice between centralised and decentralised approaches. Should one part of government control and manage all digital systems? Or should each government department or agency build and run its own?

This question affects the way public services are delivered, how secure and connected government data is, and how much money is spent on technology. Getting it wrong can lead to waste, duplication, poor service for citizens, and even major risks like cyberattacks. Getting it right can help create smoother, safer, and more cost-effective digital systems for the whole country.

In this article, we explore the differences between centralised and decentralised digital infrastructure across the whole of government, look at their benefits and downsides, and offer a few pointers to help governments find the right balance.

What is centralised government digital infrastructure?

A centralised approach means the government builds and manages digital systems through one primary organisation or integrated digital infrastructure. This central team sets the standards, runs shared services (like cloud storage or ID systems), and ensures everything is consistent and secure.

Countries like Estonia, Singapore and the UK have created central teams or digital services that lead this work. They aim to remove duplication and create systems that are easier to connect across departments.

Key features:

One government connected platforms for core digital services
Shared tools like login systems, data platforms and security
Consistent design and coding rules
Central budget and control over big tech projects

What is decentralised government digital infrastructure?

In a decentralised model, different parts of government manage their own digital systems. For example, the tax office might run its own cloud system, while the health ministry builds its own login and data platform. Each organisation decides what works best for its needs.

Some countries with strong federal or regional structures, like the United States or Germany, often take this approach, though usually with some central coordination or standards.

Key features:

Ministries, agencies or regions build and run their own systems
More freedom to tailor services to local needs
Less reliance on one central tech team
Greater variation in tools, standards and systems

Benefits of centralised digital infrastructure for government

Better integration. Central systems make it easier to connect services and share data across government. Citizens only need to sign in once, and data can move safely between departments when needed.
Lower costs. Governments can save money by avoiding duplication. Shared platforms, bulk buying of tech tools, and common standards reduce overall spending.
Stronger cybersecurity. A central team can enforce strict security rules and respond quickly to threats. It’s easier to keep systems patched and updated when there are fewer of them.
Higher quality and consistency. Common design and user experience rules mean services look and work the same, no matter which part of government runs them. This makes them easier for the public to use.
Faster digital transformation. Central teams can lead reform across the public sector, helping slower departments catch up and making sure everyone moves in the same direction.

Benefits of decentralised digital infrastructure for government

Flexibility and innovation. Agencies can build digital tools that fit their exact needs. Teams can test new ideas more easily without needing central approval.
Responsiveness to local needs. Different parts of government often serve different groups. Local teams may understand those users better and adapt faster to their needs.
Reduced risk of central failure. If a central system goes down, it can impact the whole government. Decentralised systems mean problems are often contained in one area.
Encourages accountability. When each department owns its systems, they may be more invested in making sure things work well and are maintained over time.

Key trade-offs for whole-of-government decisions

Choosing between these approaches isn’t easy. Governments must weigh up some major trade-offs:

Speed vs control: A decentralised approach may let departments move faster, but centralisation gives better control.
Customisation vs standardisation: Decentralisation allows tailored solutions, while centralisation supports a common experience for users.
Cost savings vs duplication: Central systems save money at scale. Decentralised systems risk wasting resources by repeating similar builds.

Whole-of-government choices must also consider political realities. In federal systems, national and regional governments may both have digital responsibilities. Balancing shared services and local control is key.

Hybrid models: the best of both worlds?

Many governments now aim for a hybrid model – one that centralises the parts that make sense to share, and leaves room for departments to innovate on top.

In this model:

The government provides shared digital infrastructure – such as digital ID, payments, hosting, or core data exchange platforms.
Agencies build their own services on top of this infrastructure, using common rules and tools.
A central team, often in the finance or digital ministry, sets standards, monitors performance, and supports delivery.

This approach tries to get the benefits of both models: shared savings and security, with local innovation and responsiveness.

Risks of getting it wrong

Without the right balance, governments can face real problems:

Over-centralisation can slow down service delivery, limit innovation, and frustrate agencies with rigid controls.
Over-decentralisation can lead to cyber risks, poor user experiences, wasted spending, and failed projects.
Fragmented IT ecosystems make it harder to share data, respond to emergencies, or plan government-wide reforms.

Digital infrastructure is the foundation of modern government. Poor decisions here affect everything from health and tax to policing and emergency services.

Finding the right model for the whole public sector

There is no perfect answer to the centralised vs decentralised question. But governments need to approach it from a whole-of-government view, not as isolated departments.

Some key questions to consider:

What core infrastructure should be shared across all government?
Where should departments be free to build their own systems?
How can standards, platforms and data policies be designed to support collaboration, not control?
Who should be responsible for maintaining shared digital infrastructure?
How can the public sector build trust and digital capacity in all its institutions?

By focusing on shared foundations and smart standards – while giving agencies room to deliver – governments can create digital systems that serve citizens better, save money, and reduce risk.

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