Public Sector Trends 2026: A Year of Pressure and Possibility

By Chris Hornung, Managing Director, Public Sector, Totalmobile (www.totalmobile.com)

The year ahead will bring no surprises for the public sector. Budgetary pressure will remain the dominant theme. The next Budget will show how far the government is prepared to go to balance the books, but even with new measures, local authorities and public bodies are unlikely to see much relief. The squeeze is here to stay for a while more, and that reality will shape every part of the sector in 2026.

The budget will set the tone. If funding continues to tighten, the shift toward preventive community-based care becomes even more urgent – because without it, the system will keep absorbing costs rather than reducing them, forcing further cuts.

Across all services – healthcare, social care, emergency services, infrastructure – the challenge is no longer about doing more with less- it’s about doing things differently. Incremental savings have already been made. What’s left now is real transformation.

Health and Care: Joined-Up Budgets, Joined-Up Thinking
In 2026, we’ll start to see the first moves toward shared budgets between NHS community services and local authority care. At present, those two funding streams often pull against each other. Local authorities focus on prevention but lack the resources to fund it properly. The NHS, meanwhile, is paid to treat people once they are already unwell.

Bringing those budgets together allows for a more joined-up approach, one that supports people earlier and reduces costly, lengthy hospital admissions. Technology will be a key enabler of that change, providing the solutions to monitor and support people safely in their own homes.

Policing: Transparency Under Pressure
Public confidence in policing has been shaken by recent investigations, including the BBC Panorama investigation into misconduct at Charing Cross Police Station. That kind of exposure will only increase the pressure for transparency.

Forces can no longer operate as closed systems. They will need reliable data to demonstrate accountability, who was on duty, where they were, and what actions were taken. This isn’t just about compliance; it’s about trust. Without it, confidence in policing will continue to erode.

Local Government: From Survival to Strategy
From April 2026, councils will return to multi-year financial settlements. Having visibility of budgets beyond a single year allows councils to plan strategically, to invest in transformation in year one and see benefits in years two and three. The current one-year cycle has made that almost impossible.

Councils that use this opportunity to take a more innovative approach – embracing digital solutions, automation, and new delivery models – will be the ones that thrive. Those who remain risk-averse will struggle to keep pace.

AI and the Reluctant Public Sector Revolution
Artificial intelligence will start to feature more prominently across public services next year, though adoption will be slower than in the private sector. Caution around data security and public perception will continue to hold some organisations back.

The key will be to use AI safely within existing, secure platforms rather than through open, public systems. When the technology operates inside trusted environments, using data that already sits within the organisation, risk remains low and benefits can be realised faster.

The real risk lies in inaction. The longer the public sector hesitates, the further it falls behind.

Rebuilding Public Trust
Across every part of the public sector, one theme runs through everything: a loss of public confidence. People no longer assume that the services they rely on will deliver effectively. That perception of inefficiency and bureaucracy is difficult to shift, but it won’t change through caution.

Restoring trust requires openness, transparency, and innovation. The public doesn’t expect perfection. They expect progress and they want to see public sector bodies take measured risks, try new things, and deliver services that feel modern, responsive and deliver meaningful change.

Looking Ahead
The coming year will be another difficult one, but it may also mark the start of quiet transformation. Shared budgets, transparent policing, longer-term financial planning, and practical use of AI all point towards a more connected, forward-looking public sector.

The challenge now is to turn those opportunities into action. The levers are there. It just takes the courage to pull them.