By Alison Scott | 1 December 2011
Working in the public sector today is a bit like taking part in The Apprentice. Finance staff face a range of trials and tribulations and need good skills to cope
As I write, the Young Apprentice TV series is halfway through. What, you might ask, has this got to do with public sector financial management?
Well, the contestants face a series of challenges, from the regular to the unexpected, as do public sector staff. Although this might feel like a time of unprecedented upheaval, many of the changes in the public sector have been tackled somewhere in some form before. Learning from others and from the past are useful skills – something The Apprentice candidates don’t always appreciate.
The first of the public sector’s current challenges – cutting public spending – was expected. But the scale of the cuts was not. It’s no longer ‘more with less’; not even ‘the same with less’. Now it’s ‘less with less’.
For councils, the scale and pace of implementation is even greater as the cuts have been front-loaded. But local government has traditionally had greater flexibility over its investment strategies, and central government can learn from how the best authorities have managed to reduce budgets.
In January, the Treasury published a paper on improving financial management in government – Managing taxpayers’ money wisely: commitment to action. One of the enablers of success it identified was ‘a cost-conscious culture – ensuring every decision is built on informed financial assessment’. Lord Sugar would expect no less.
The second of the tests facing the public sector is the way it provides services. The Open public services white paper contains five main principles for reform: choice; decentralisation; diversity; fairness; and accountability. Tensions exist between some of these principles – such as decentralisation and accountability – and between them and what is happening in central government.
One example is centralised procurement under the Cabinet Office’s Efficiency and Reform Group. This aims to secure economies of scale from the government’s buying power – but how does this sit with local choice and decentralised decision-making?
One problem the public sector will increasingly face is managing competing priorities, with financial and non-financial targets pulling in different directions. Good option appraisals, with clear criteria for balancing competing priorities, will be needed.
But technical expertise is not enough. Soft skills are also needed, as finance professionals have to be able to influence their peers. This should not be by manipulation, the tactic used by The Apprentice finalist ‘Jedi Jim’, but by being able to explain the financial issues in terms that policy people and managers can relate to. Take the proposed changes to the leasing accounting standard. If you tell senior managers that the distinction between operating and finance leases might be removed, they won’t care. But if you explain the budgetary impact of the change, you will get a different reaction.
The Apprentice candidates also have to be able to work as part of a team, while still shining as individuals. Similarly, government departments need to consider where there are gains to be made from joint working and where they need to be distinctive. There are always tensions – if not open warfare – in the teams in The Apprentice.
Similar clashes will arise in government when groups of people from different departments with their own cultures are thrown together, unless the situation is well managed. Finance, logistics and systems issues are relatively easy compared with people and cultures.
As an example, look at CIPFA and the Institute of Internal Auditors. By identifying areas where both can obtain benefits from working together, the institutes plan to develop pan-public sector internal audit standards and guidance, and make it easier for members of one institute to qualify with the other. A classic win-win situation, admittedly not something you see on The Apprentice that often.
But on the show, there can be only one winner, and ultimately the candidates are competing against each other. In the public sector, better outcomes can be achieved by collaboration.
One final thing to remember about The Apprentice: the last two winners weren’t salespeople; they were the ones who were happy to get their hands dirty with spreadsheets, could understand the figures, and explain the numbers to their team. This is where the finance professional can excel, and this is the time for us to shine.
Alison Scott is CIPFA’s assistant director for local government. The institute is holding a free conference on the changes in central government finance in London on December 6
Working in the public sector today is a bit like taking part in The Apprentice. Finance staff face a range of trials and tribulations and need good skills to cope
As I write, the Young Apprentice TV series is halfway through. What, you might ask, has this got to do with public sector financial management?Well, the contestants face a series of challenges, from the regular to the unexpected, as do public sector staff. Although this might feel like a time of unprecedented upheaval, many of the changes in the public sector have been tackled somewhere in some form before. Learning from others and from the past are useful skills – something The Apprentice candidates don’t always appreciate.
The first of the public sector’s current challenges – cutting public spending – was expected. But the scale of the cuts was not. It’s no longer ‘more with less’; not even ‘the same with less’. Now it’s ‘less with less’.
For councils, the scale and pace of implementation is even greater as the cuts have been front-loaded. But local government has traditionally had greater flexibility over its investment strategies, and central government can learn from how the best authorities have managed to reduce budgets.
In January, the Treasury published a paper on improving financial management in government – Managing taxpayers’ money wisely: commitment to action. One of the enablers of success it identified was ‘a cost-conscious culture – ensuring every decision is built on informed financial assessment’. Lord Sugar would expect no less.
The second of the tests facing the public sector is the way it provides services. The Open public services white paper contains five main principles for reform: choice; decentralisation; diversity; fairness; and accountability. Tensions exist between some of these principles – such as decentralisation and accountability – and between them and what is happening in central government.
One example is centralised procurement under the Cabinet Office’s Efficiency and Reform Group. This aims to secure economies of scale from the government’s buying power – but how does this sit with local choice and decentralised decision-making?
One problem the public sector will increasingly face is managing competing priorities, with financial and non-financial targets pulling in different directions. Good option appraisals, with clear criteria for balancing competing priorities, will be needed.
But technical expertise is not enough. Soft skills are also needed, as finance professionals have to be able to influence their peers. This should not be by manipulation, the tactic used by The Apprentice finalist ‘Jedi Jim’, but by being able to explain the financial issues in terms that policy people and managers can relate to. Take the proposed changes to the leasing accounting standard. If you tell senior managers that the distinction between operating and finance leases might be removed, they won’t care. But if you explain the budgetary impact of the change, you will get a different reaction.
The Apprentice candidates also have to be able to work as part of a team, while still shining as individuals. Similarly, government departments need to consider where there are gains to be made from joint working and where they need to be distinctive. There are always tensions – if not open warfare – in the teams in The Apprentice.
Similar clashes will arise in government when groups of people from different departments with their own cultures are thrown together, unless the situation is well managed. Finance, logistics and systems issues are relatively easy compared with people and cultures.
As an example, look at CIPFA and the Institute of Internal Auditors. By identifying areas where both can obtain benefits from working together, the institutes plan to develop pan-public sector internal audit standards and guidance, and make it easier for members of one institute to qualify with the other. A classic win-win situation, admittedly not something you see on The Apprentice that often.
But on the show, there can be only one winner, and ultimately the candidates are competing against each other. In the public sector, better outcomes can be achieved by collaboration.
One final thing to remember about The Apprentice: the last two winners weren’t salespeople; they were the ones who were happy to get their hands dirty with spreadsheets, could understand the figures, and explain the numbers to their team. This is where the finance professional can excel, and this is the time for us to shine.
Alison Scott is CIPFA’s assistant director for local government. The institute is holding a free conference on the changes in central government finance in London on December 6
