Yesterday we saw George Osborne announce a Budget that remained committed to the deficit reduction programme. A 'Budget for building a resilient economy' was the dominant message and so, despite positive growth forecasts of 2.7% for 2014 and an improving employment landscape, the chancellor was clear that there is still a lot more work to do.

No council will be surprised to know they will continue to face challenging times ahead and will need to continue to be innovative in their approach to providing services to the community. While expectations of service delivery remain the same, the chancellor’s support of a council tax freeze serves as a reminder of the need to increase efficiency at the same time as reducing costs.

As such, with decreased budgets and a reduced local government workforce, local authorities will have to ensure they retain and motivate their top talent. Employee motivation is particularly vital if local authorities are to succeed in delivering more for less and due regard must be afforded to teams on the front line of service delivery to mitigate the risk of worker fatigue.

But there are positives in some of the announcements. There will be a number of funds available for local authorities to help finance projects to restore flood defences in the wake of the recent severe weather. £140m has been made available for immediate repairs which will help communities develop stronger resilience in the long term to extreme weather.

Local authorities will also receive help to repair potholes. They will be able to bid for a share of £200m designated to help the maintenance of local roads affected by adverse weather, which will enable councils to improve roads without denying resources for wider services. Investing in the proper materials and maintaining roads is vital to ensure the risk of future potholes is minimised and should go some way to save councils money in the long term.

Still, the Budget gives no room for councils to relax. Introducing innovation and implementing changes within a reduced funding landscape will pose challenges not only in maintaining an engaged workforce but, more broadly, in managing the long term resilience of the authority.

However, councils have demonstrated their ability not only to negotiate the risks of their new operating environment, but also to create a more relevant profile of local services for their communities, although no one underestimates the scale of the challenges ahead.

Andrew Jepp is director of public sector at Zurich Municipal