Local authorities continue to face significant change, from financial pressures and increasing service demand to evolving governance requirements and rapid technological developments. Drawing on insights from across our Public Sector team, this article explores some of the key challenges councils are encountering today, where risks are most likely to arise, and the practical steps authorities can take to strengthen resilience, governance and service delivery in the years ahead. Keep reading to see what they have to say.
What are the Biggest Challenges Councils are Facing Right Now?
Tim Walmsley, partner in our Social Housing team answers:
Local authorities across England are operating in an increasingly challenging environment. The issues most frequently raised by councils include financial pressures, growing demand for essential services, workforce challenges and the need to maintain ageing infrastructure.
Financial sustainability remains a key concern. Many councils are facing rising costs while demand for services such as adult social care, children’s services, temporary accommodation and local transport continues to increase. At the same time, budgets remain constrained, forcing authorities to make difficult decisions about priorities and service delivery.
Governance and compliance obligations also continue to grow. Councils must balance robust decision-making, transparency and risk management while responding quickly to changing economic and regulatory conditions.
A recurring challenge is delivering high-quality services with limited resources. Authorities are increasingly expected to do more with less, requiring innovation, partnership working and careful allocation of funding.
Looking ahead, councils will need to plan for long-term financial resilience, housing demand, climate adaptation, digital transformation and workforce capacity. Strategic planning will be essential to ensure services remain sustainable and responsive to the needs of local communities.
Where are Councils Most Exposed to Legal and Governance Risk?
Tim Lane, senior associate in our Corporate team answers:
Most legal and governance challenges do not arise because councils lack the power to act. More often, they stem from weaknesses in process, particularly during periods of change, growth or increased scrutiny.
In our experience, councils are often exposed where they cannot clearly explain why a decision was made. A clear written record of the reasoning behind significant decisions is often the best protection against future challenge.
Pressure to act quickly can also create risk. Urgency is sometimes unavoidable, but councils should resist treating it as a reason to bypass established procedures.
Unclear authority is another common issue. Before committing expenditure, signing contracts or launching projects, councils should be clear who has the power to act.
Conflicts of interest can undermine confidence in decision-making. Keeping declarations under regular review helps identify issues early.
Finally, governance is strongest when councillors understand their responsibilities. Investment in member training is one of the most effective ways to reduce risk, promote good decision-making and maintain public trust.
Where are Disputes and Challenges Most Commonly Arising?
Hannah Slade, senior associate in our Property Litigation team answers:
As councils navigate devolution and local government reorganisation, property-related disputes can arise from the transfer and disposal of public assets. Questions around occupation rights, historic liabilities, restrictive covenants, and the allocation of property interests between authorities can create legal and operational challenges.
Councils acting as commercial landlords face an additional layer of complexity, balancing their responsibilities as property owners with their statutory obligations as public authorities. Disputes can arise in relation to lease obligations, service charges, repair liabilities, rent reviews, lease renewals and the exercise of break rights. Decisions affecting tenants must not only be commercially sound but also consistent with the statutory framework under which councils operate. This can create challenges where councils are seeking to optimise income, recover possession or reconfigure their property portfolios.
As property portfolios are reviewed and reorganised as part of devolution and local government restructuring, councils should prioritise early due diligence on occupational arrangements and landlord obligations, to identify potential areas of contention early. Robust lease management processes, including monitoring of key dates such as rent reviews, break options and lease expiries, can help avoid disputes. Proactive communication and early legal involvement can help manage expectations and support property objectives.
What Technology and Information Governance Issues Should Councils Have on Their Radar?
Leanne Yendell, solicitor in our Intellectual Property, Data Protection and Technology team answers:
Councils are increasingly expected to do more with less, making technology both a challenge and an opportunity. Emerging technologies such as AI can deliver significant efficiencies, helping to automate routine tasks, improve information retrieval and support service delivery. However, they can also increase information governance burdens if not managed effectively.
As recently reported by the BBC (but known by public bodies for some time!) one growing pressure is the rise in Freedom of Information and Environmental Information Regulations requests, driven in part by greater public awareness and easier access to tools such as ChatGPT. At the same time, councils are creating and storing more information across a wider range of systems and platforms. Whilst the legal obligations remain unchanged, identifying, reviewing and retrieving information has become more complex.
This presents a clear paradox: technology can create governance challenges whilst also helping to solve them. The right tools can improve records management, strengthen audit trails, support compliance and reduce administrative workloads.
The key is ensuring that innovation is supported by strong governance. Existing policies, risk assessments, procurement processes, staff training and oversight arrangements remain essential. Councils that treat technology governance as an ongoing responsibility will be best placed to realise efficiency gains whilst maintaining transparency, accountability and public trust.
Conclusion
While the challenges facing councils are varied and often complex, many share a common theme: the need for clear decision-making, strong governance and proactive planning. Whether managing financial pressures, navigating property disputes, embracing new technologies or reducing legal risk, early action and robust processes can help councils respond with confidence. Our Public Sector team continues to work alongside local authorities to provide practical, strategic support as they adapt to an evolving landscape and deliver for their communities.
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