Iain Murray, CIPFA Director of Public Financial Management (PFM)
The 2025 Spring Statement arrived at a critical moment for public finances. Demand on public services is soaring, and financial pressures are mounting. The government has addressed immediate fiscal concerns, but we are still waiting for a credible path toward long-term financial sustainability. Without real reform, we risk deepening uncertainty.
The reality check: public finance on the edge
Public services are stretched to breaking point. In 2025/2026 budget setting, more local authorities required significant flexibility through capitalisation directions, highlighting the growing risk of councils being unable to provide essential services. While the government has responded with emergency interventions, the fundamental issue remains; we need to rethink how local government operates.
Without structural change, short-term fixes will continue to fail against long-term challenges. Demand will keep rising unless we address the root causes. A sustainable approach is essential — one that balances financial responsibility with effective service delivery to secure the future of local government.
The £14 billion in spending cuts set out in the Spring Statement highlight the tough challenge ahead for this government. There is clear ambition for public sector reform — with NHS reorganisation in motion, local government reorganisation and devolution underway, and renewed police focus on public trust and neighbourhood presence.
However, this ambition is set against a fragile and uncertain fiscal backdrop. Can the government afford the cost of such widespread change while still balancing the books? Without careful financial planning, the risk is that reforms could add further strain rather than deliver meaningful, lasting improvements.
At CIPFA, we are keen to play our part in answering that question — though we don’t claim to have all the answers. However, one thing is clear: while the government has set out its missions and priorities, what’s missing is a coherent, cross-government plan for public service delivery.
Ambition is laudable, but without a clear strategy, the current patchwork of reforms risks becoming, at best, a missed opportunity — and at worst, a distraction while our essential services slide further into managed decline. Now is the time for a bold, joined-up approach to securing the future of public services.
Long-term reform: must it be the path forward?
As public services face critical strain, the government must commit to a clear, guiding vision for public sector reform. With financial pressures mounting and demand rising, short-term fixes are not enough. Focusing solely on today’s fiscal challenges risks a future where financial instability spirals out of control.
My hope is that the June Spending Review will provide a clear direction of travel.
Looking ahead: will reform stick?
The appetite for reform exists, but without a coherent implementation framework, we risk repeating the same short-term cycles that have weakened public finance for decades.
Without real, structural change, the financial sustainability of local bodies — and the essential services communities rely on — will continue to erode. The choices made today won’t just shape the present; they will define public finance for years to come.