By Mike Thatcher | 19 December 2013
CIPFA is examining ways to improve public financial management by developing a method of measuring spending across all public services in different areas of the country.
Plans for the new spending framework will be developed over the next six months covering expenditure by town halls, Whitehall, the NHS and beyond. It will enable duplication of spending to be identified and, in the longer term, to measure the benefits of programmes like early intervention and public health.
The initiative was discussed at a recent round table held at CIPFA’s London headquarters and chaired by chief executive Rob Whiteman.
‘We are all very interested in transparency and local accountability, but there isn’t a yardstick or an industrial way of reporting how much spending takes place across the whole of central government, local government and health,’ Whiteman said.
‘The longer I’ve been around the more I realise that transparency is a transactional endeavour, where huge quantities of data are dumped on the public. Actually, transparency shouldn’t be a series of piecemeal transactions, but should be about whether money is being well spent.’
CIPFA will build on some initial work undertaken by Essex County Council and Staffordshire County Council. Andy Burns, Staffordshire’s director of finance and resources, spoke at the round table and shared research showing that £7.5bn was spent on public services in the county in 2012/13.
This included £1.3bn spent by the county council, £2.1bn by the NHS and £2.7bn by the Department for Work and Pensions.
Burns said that, as the Section 151 officer, he had previously seen his responsibility as overseeing the county council’s spending. But now it was just as important to influence how the £7.5bn is spent across Staffordshire public services.
With the government’s austerity programme showing no signs of abating, he added it was important to understand that councils couldn’t do everything. It was not about ‘prettier accounts’, but required a different conversation with the public about who does what.
‘I don’t buy the argument that there is no cash about. There is a huge amount of cash, but actually it’s not spent correctly. The debate should be on how well we spend it, not how much we spend,’ Burns said
The round table was attended by senior finance practitioners from a number of public bodies and audit watchdogs.
In addition to Andy Burns contribution, there were presentations from: Ian Carruthers, CIPFA’s policy and technical director; Michael Brodie, finance and commercial director at Public Health England; and Carey Oppenheim, chief executive of the recently established Early Intervention Foundation.
Oppenheim told the round table audience that CIPFA’s work on spending in an area was very relevant to her agenda. ‘One of the key things is about how we start to shift spending from late intervention to early intervention, and then to look at the quality of that spend,’ she said.
She added the foundation had discussed this issue with CIPFA, the Local Government Association, Public Health England and the Treasury, among others.
‘We have talked [with CIPFA] about whether we might develop a children’s investment accounting standard over time that would help both locally and nationally to think about how we start to shift money not only to improve outcomes for families and children but to generate savings,’ Oppenheim said.
Whiteman concluded the debate by suggesting that measuring total area spending was the first part of CIPFA’s programme. The second part required finding a means to measure value, quality and, ultimately, the outcomes of that improved spending.
‘We need to ask how we can support early intervention, public health, troubled families, the Work Programme and other areas with as straightforward, respected and useful means of evaluation as net present value gives us.’
Whiteman said that CIPFA would report back on progress within six months.
