Only half of public sector finance directors played a lead role in preparing their organisation for the impact of the Spending Review, according to a survey published today.
Managers across the public sector were unable to provide high-level insight on the review as they were ‘heavily invested’ in routine compliance and control activities, the research by PricewaterhouseCoopers shows.
PwC’s survey, Stepping up: the challenges for finance in the public sector, covered more than 50 finance managers across central government departments, arm’s-length bodies, local authorities, health and police bodies.
It states that it is a ‘surprise’ that just over half of the respondents reported that they played a lead role in planning for the Spending Review for their business. The other respondents said they played an advisory or support role.
Public sector finance managers spend twice as much time on routine work compared with their counterparts in the private sector, the report says.
PwC partner John Berriman, who is head of the government and public sector finance practice, urged finance directors to ‘learn from best in class finance functions from both the private and public sectors’.
The report, the third in an annual series on public sector finance functions, found that the organisations achieved average savings of 20% over three years. Almost 80% of respondents said this level of saving was achievable.
Some 20% of respondents did not have a written vision or strategy for finance but almost 60% had plans to enter into new or revised shared service arrangements.
Berriman added: ‘It is surprising that more respondents were not in a lead role in the Spending Review. Our experience suggests that in some cases the finance function was not seen as having the right skill set to provide the insight needed, so these skills were sought elsewhere in the organisation.
‘High-quality public sector finance managers are vital. At this time of austerity, with the impact of the spending cuts shortly to take hold, the role of the finance function is absolutely vital. Finance directors need to deal with the enormous challenge of managing limited resources, driving through improvement plans and placing themselves at the heart of public sector financial decision making.’
PwC call for public sector organisations to plan and build an ‘insight capability’ to overcome the current lack of skills and resources. Finance people must also be given the opportunity to acquire and develop the broader management skills they will need in order to make a full contribution to their organisation, and role swaps should be held between organisations to promote best practice.
‘Finance knows what it needs to do. It must make concrete plans and deliver on them,’ Berriman added.
