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The UK Government faces one of the largest Budget deficits among G20 nations. As we approach the 2010 emergency Budget and the Comprehensive Spending Review, all policy priorities will be set against the corresponding need for huge fiscal consolidation. In this environment, the priority must be to ensure that we achieve the greatest possible value for taxpayers’ money.
At ICAEW, we believe that this will only be possible through informed public debate and a spirit of collaboration across government, the public sector and society at large. Crucially, this dialogue requires a clear understanding of both the costs and the value of public services.
Our members, over 4,000 of whom work in the public sector, have a key role to play in advising and encouraging this public debate. This survey, Public sector finances – views from the inside, sets out insights from public sector finance professionals on the opportunity for delivering value to the taxpayer for less.
The headlines of this research suggest that there is some room for manoeuvre. Over 80% of public sector members interviewed believe that further efficiency savings could be made in their organisation without affecting the current level of service they provide. The scale of the savings is significant: 34% of respondents believe that between 2.5-5% of discretionary budget could be saved, 24% cite possible savings of between 6-10%, and 7% cite possible savings of over 11%.
Improved use of IT and reduced staff headcount costs are viewed as the major opportunities for efficiency savings. However, the survey demonstrates that members are
concerned about the prospect of political interference and, to a lesser extent, about the wider culture of financial management across their organisations as barriers to achieving financial savings in the future.
While there is a significant degree of confidence in both the quality of leadership and the influence of the finance function in their organisations, central government regulations and targets stand out as a principal barrier to public sector finance teams having more influence over management decisions about financial efficiency.
Of particular note, it appears that the majority of interviewees still need to be convinced about the value of greater online transparency of public spending information.
Overall, the message of this report is that there is scope to spend public money better. The government has an opportunity move beyond simple salami slicing of public
expenditure to take forward cost reduction in a strategic manner that best delivers value for taxpayers’ money. The expertise of public sector finance professionals will be critical in order to achieve this.
We hope this survey will help build understanding about the current state of public spending. Only through a shared awareness of the financial difficulty we face, and
the scope for meaningful reform, will we be able to take the necessary steps to restore our public finances in the long term and create a culture of genuine fiscal responsibility in the UK.
Michael D M Izza
Chief Executive, ICAEW