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PDF Report: Insights into UK councils financial confidence, budget pressures, capital risks and workforce challenges shaping local government in 2025–26.
In brief:
Councils report rising confidence in managing in‑year budgets, with 52 percent now confident in delivery, but medium‑term sustainability remains weak, with 40 percent not confident in achieving balance and 36 percent concerned about issuing a Section 114 Notice.
Long‑term resilience is being eroded, as 64 percent of councils are cutting funding from strategic priorities, and capital delivery challenges persist with 57 percent not confident programmes will be delivered on time or on budget.
Balance sheet pressure continues to grow, with rising concern about debt and reserves and 61 percent of councils depending on asset disposals to afford capital programmes.
Councils are becoming more risk aware, with 76 percent confident in their risk management practices and increasing preparedness for unexpected external events, despite significant uncertainty driven by funding, Fair Funding Review reforms, SEND pressures and fragility in the adult social care market.
Workforce capacity is an escalating constraint, with 90 percent of councils concerned about attracting and retaining finance talent, placing operational resilience at risk even as finance teams become more strategically central.
