Talent and Tech top 2026 agenda for local government finance leaders, finds Grant Thornton
New research by leading business services and finance firm Grant Thornton has revealed the 2026 priorities for the UK’s local authorities’ finance leaders. The survey of over 100 finance directors and section 151 officers found that attracting and retaining talent was top of the agenda for nearly half of respondents (42%), with 40% seeing digital transformation their key priority for the year. Over a third (36%) cited improving reporting and analytics as their top priority.
The Public Sector Finance Leaders Barometer is a nationwide pulse check of the pressures, priorities and sentiment shaping local government finance. Compiled from the insights of Section 151 officers and finance directors, it provides a data‑rich view of how leaders are navigating 2026, a year defined by financial constraints, regulatory complexities and rising demand.
Responders also outlined the biggest challenges they see for the year ahead. Top was dealing with rising demand for services (33%), closely followed by financial sustainability and fair funding (31%), and local government reorganisation (21%).
Also in the mix for local authorities finance professionals are facing issues like data quality (32%), ERP optimisation (30%), and operating costs (31%).
Challenges ahead, but confidence is strong
An encouraging 84% are confident their medium-term financial strategy assumptions will hold over the next three years. But top risks to financial health were outlined as demand growth (36%), unfunded policy changes (34%), and failure to deliver planned savings or transformation (30%). Political override, capital slippage, and funding reform uncertainty also feature.
Whilst conscious of the challenges ahead there is strong confidence in core finance capabilities: 78% feel confident in delivering accurate, timely insights, and 73% in forecasting. But confidence dips in emerging areas, with only 70% confident in delivering AI-driven insights (with 15% not confident) and 69% confident in identifying growth-driving investments (9% not confident) and 68% confident in responding to regulatory change.
Overall sentiment is positive, 78% are more optimistic than six months ago, but 13% are more pessimistic, reflecting uneven local pressures.
Time and Investment plans
Finance leaders expect to allocate more time and resources to forward-looking disciplines, but operational demands continue to stretch teams thin.
Time is expected to be spent increasingly on forecasting and scenario planning according to 80% of those surveyed. AI and automation comes in second (75%) and business partnering third, at 71%. Upskilling (70%) and ESG transparency (67%) were also identified.
However, due to capacity strain, some anticipate reductions in time spent on partnering (9%), upskilling (7%) and ESG reporting (6%). Transparency, AI adoption and business partnering are recognised as critical but compete with statutory pressures and limited staff headroom. The result is a tension between what leaders want to spend time on and what they can.
Commenting on the findings, Simon Christan, director in Grant Thornton’s public sector team said:
“We know all too well the sustained pressures that local government finance has operated under for almost two decades. The challenge of delivering results against ever-reducing funding and evolving expectations will sound familiar.
“But now we’re seeing something change. Those in local government have reached an inflexion point. Far from being concerned about what they are expected to deliver, finance leaders are confident in this, it’s how to deliver that is shaping their approach and thinking.”
“Councils are being asked to innovate at speed in an environment designed for assurance and accountability, not rapid experimentation. The reality is that day-to-day pressures are intensifying, whilst capacity is finite.
“The result is a widening gap between strategic aspiration and operational bandwidth.”
Decision-making: A desire for more challenge, not less
Nearly all (95%) of finance leaders agree that healthy tensions when debating options improves decisions, but 41% believe there is currently too little challenge in senior discussions. Confidence in managing tension is uneven, with 68% agreeing they can manage it effectively, while 24% disagree.
The Barometer surfaces a series of tensions that finance teams must navigate daily; these are not leadership failings, they are structural contradictions built into the system:
- Current skillsets vs future capability needs (42%)
- Speed vs accuracy in decision making (36%)
- Growth vs risk appetite (34%)
- Short term pressures vs long term goals (32%)
A significant 70% believe transformation is coming at the cost of workforce morale, a warning sign given the sector’s already acute capacity challenges.
Simon Christian added:
“Ultimately, the Barometer paints a picture of finance leaders who feel confident in their strategic understanding, clear about the priorities and committed to modernisation.
“It’s not hyperbole to say local government finance is at a turning point. They know what needs to change but recognise that doing so requires a renewed focus on skills, data, technology and governance.
“This is not a crisis narrative; it is a capability narrative. Councils are ready to drive transformation. The question is whether they will be given the space, tools and capacity to deliver it.”