Public sector finance directors, including those in local government, must do more to merit a place at the ‘top table’ of their organisation, leading consultants have reported.
A study by PricewaterhouseCoopers (PWC), published on 22 May, reveals a ‘mixed appetite’ for greater transparency within public sector board rooms, and ‘modest aspirations’ for their finance functions.
But the study – which includes responses from Croydon, Merton and Tower Hamlets LBCs, as well as Birmingham City Council – implies public finance executives often fail to demonstrate how they improve organisations. John Berriman, senior partner and head of public sector practice at PWC, said: ‘There has been undoubted progress in recent years. But finance functions in the public sector must demonstrate their capability and capacity as businesses partners, and add value to the performance of their organisations to earn a place at the top table and gain essential top level sponsorship.’
PWC researched attitudes among senior finance personnel from a range of public bodies, including town halls, devolved governments and Whitehall departments.
None of the respondents rate their finance functions as high performing, while just half believe they have comprehensive compliance and control frameworks in place, and many spend little time providing their executives with insights into business performance. Yet respondents were not generally seeking radical overhauls of their finance functions.
Sources which responded to the PWC study suggested these candid self-assessments could, in part, fuel boardroom malaise over the finance function.
Mr Berriman urged boards to prioritise the finance function. ‘A mixed appetite for the board’s transparency is a matter for concern, considering the general drive across government and the public sector for greater accountability.
‘We also question whether its acceptable that public organisations… can continue to have relatively modest aspirations for their finance functions,’ he said.
A study by PricewaterhouseCoopers (PWC), published on 22 May, reveals a ‘mixed appetite’ for greater transparency within public sector board rooms, and ‘modest aspirations’ for their finance functions.
But the study – which includes responses from Croydon, Merton and Tower Hamlets LBCs, as well as Birmingham City Council – implies public finance executives often fail to demonstrate how they improve organisations. John Berriman, senior partner and head of public sector practice at PWC, said: ‘There has been undoubted progress in recent years. But finance functions in the public sector must demonstrate their capability and capacity as businesses partners, and add value to the performance of their organisations to earn a place at the top table and gain essential top level sponsorship.’
PWC researched attitudes among senior finance personnel from a range of public bodies, including town halls, devolved governments and Whitehall departments.
None of the respondents rate their finance functions as high performing, while just half believe they have comprehensive compliance and control frameworks in place, and many spend little time providing their executives with insights into business performance. Yet respondents were not generally seeking radical overhauls of their finance functions.
Sources which responded to the PWC study suggested these candid self-assessments could, in part, fuel boardroom malaise over the finance function.
Mr Berriman urged boards to prioritise the finance function. ‘A mixed appetite for the board’s transparency is a matter for concern, considering the general drive across government and the public sector for greater accountability.
‘We also question whether its acceptable that public organisations… can continue to have relatively modest aspirations for their finance functions,’ he said.
Viewpoint
There has been, for some years, a trend towards bigger and bigger contracts in local government. These also tend to have longer contract periods, because bigger contracts take longer to gear up for.
Until recently, much of the growth has been from service-sharing, where contracts cover similar work for several authorities. There is no doubt that this secures economies of scale, but it takes time to set up, because a great deal of homework has to be done by the different authorities.
More recently, we have seen some large contracts put together by bundling, in which a single authority assembles a deal covering different types of work.
Undoubtedly, some very keen tenders have been received for these bundles of work, especially during the recession, but I think the jury is still out as to whether these keen will translate into low long-term costs.
Remember, the contracts in question do not offer the same economies of scale as service-sharing, and like all contracts for long periods, they will have to be renegotiated several times to accommodate the inevitable service changes
Will Werry
chair, CIPFA-commissioning joint committee
There has been, for some years, a trend towards bigger and bigger contracts in local government. These also tend to have longer contract periods, because bigger contracts take longer to gear up for.
Until recently, much of the growth has been from service-sharing, where contracts cover similar work for several authorities. There is no doubt that this secures economies of scale, but it takes time to set up, because a great deal of homework has to be done by the different authorities.
More recently, we have seen some large contracts put together by bundling, in which a single authority assembles a deal covering different types of work.
Undoubtedly, some very keen tenders have been received for these bundles of work, especially during the recession, but I think the jury is still out as to whether these keen will translate into low long-term costs.
Remember, the contracts in question do not offer the same economies of scale as service-sharing, and like all contracts for long periods, they will have to be renegotiated several times to accommodate the inevitable service changes
Will Werry
chair, CIPFA-commissioning joint committee
