The challenges facing public services are vast. With much political uncertainty in 2026 already, both globally and nationally, planning ahead is difficult.

Henning Diederichs, Senior Technical Manager in the Public Sector Team explains that this has been seen over the past two budgets, with the public finances ‘extremely tight’.

“There’s been two rounds of tax raising measures that have come into place,” he says. “The problem is, we have continuously rising demand for public services.

“We have an aging population, so there’s stress on the NHS. We have increasing numbers of pensioners, so the pension expenditure is increasing, and then more recently there’s been the ending of the peace dividend so there’s pressure on raising defence spending.”

This has caused enormous financial pressure on the government, says Diederichs, and as staffing levels are being reduced, they are essentially trying to provide “more and better services but with fewer people”.

Despite the vast challenge facing the sector, there is also a unique opportunity afforded to it in the form of data, says Diederichs.

“With a bit of investment in data analytical skills and the application of AI, I think there is an opportunity to try to deliver better, more interlinked services using technology,” he says. “To try and be able to do that with fewer people.”

That will come to pass in the next 5 to 10 years once AI is more embedded, he adds.

Financial sustainability

But even with the addition of AI, there is a question around the financial sustainability of public services. Diederichs says his team are ‘concerned’ about the long-term sustainability of public finances, as “we don’t see a coherent strategy to try and tackle some of these underlying symptoms head on”.

He adds that public services are currently “living beyond our means”, and that longer term reforms are needed to improve economic growth.

In order to bridge that gap, Diederichs suggests putting more accountants at the top of government. “There needs to be a much better, coherent plan,” he says. “We’d like to see accountants sitting at that top table, to provide a bit of long term thinking, to try and counteract that sort of political short-termism.”

A shift in skills required

While the more traditional role of accountants in the public service sector is to hold the government to account through the annual reporting and audit processes, Diederichs adds there’s been a shift in the skills required for finance and accounting professionals, which could prove valuable for future planning.

Diederichs says this shift has come about through sustainability reporting after the central government adopted the Taskforce Financial Related Climate Disclosures framework. This requires looking ahead, forecasting what your businesses would look like in different scenarios, alongside the risks and opportunities in 2050 and as far as 2100.

While this is geared towards the climate lens, Diederichs suggests it could be valuable for other types of risks. And though it may seem a long way from now, in 25 years’ time in 2050, people in their forties and earlier will be working, and people in their fifties and sixties (and beyond) will be requiring government services. It is only right that government thinks long term to continue to provide the public services we rely on. 

“That is a shift in mindset, and I welcome it,” he says. “I think it could really lead to some valuable information to be had.”