Big changes are coming that will set the course for the next decade for everyone in the public sector.
In reality, senior decision-makers have been preparing for months, analysing announcements made by the main parties since the autumn party conferences. A select band of Whitehall officials have also seen more detailed policy proposals as part of pre-election planning.
The sector gathered for two busy days in Manchester, the city that has influenced UK politics for generations. It was the first big public sector event after the elections. What’s going to change and how can the sector be ready?
Power-sharing
The first big discussion explored the advantages and challenges of further devolution as a means to solve the long-term funding crisis.
All the political parties have pledged to push more power out of Whitehall. The question is whether money will follow it.
CIPFA asks: “How do local governments get the certainty they need over the financial settlement, with the flexibility to make meaningful, agile decisions to benefit their local communities?”
Paul Kissack, group chief executive of the Joseph Rowntree Foundation, Cllr Susan Hinchcliffe, leader of Bradford Metropolitan District Council, and Dr Laurence Ferry, professor in accounting for democracy at Durham University Business School, were on the panel.
It’s the big post-election issue for UK government.
The Institute for Government says: “The next government must extend devolution to 85% of England to deliver meaningful and balanced economic growth.”
How it works in reality is the critical issue.
Jonathan Werran, chief executive of Localis, tells PF: “Based on the local elections, it’s going to be an issue, as we now have a dozen metro mayors. Keir Starmer has already had them around the table to discuss the housing revolution and more.
“The Conservatives have done a lot to decentralise, but the levelling-up funding hasn’t got out to all of the places that needed it,” he said. “The Lib Dems have recovered in their South West heartlands and could adapt their governance models set out in The Orange Book, such as devolution on demand.”
But there is one certainty – the demand for more regional governments. Yorkshire has its mayors; now Lancashire wants more power.
In a statement before the general election, Phillippa Williamson, leader of Lancashire County Council, Phil Riley, leader of Blackburn with Darwen Borough Council, and Lynn Williams, leader of Blackpool Council, said: “We remain committed to securing a devolution deal for Lancashire. We believe the transfer of powers from central government to Lancashire is in the best interests of residents and businesses.”
Preventative work
Early intervention that stops more expensive action later is the top goal of every public sector leader; yet, in successive governments, it has been the first casualty.
Labour’s shadow health secretary, Wes Streeting, says that “a system geared to providing late diagnosis, instead of early intervention, fails millions”.
The event heard from experts, including former health secretary Patricia Hewitt and David Finch, assistant director at the Health Foundation, about what must change.
CIPFA says: “There are an increasing number of voices calling for a rethink on how we shift the emphasis towards prevention. It will demand innovative solutions to consider how we can allocate existing resources more effectively to prevent ill-health. Not only is this good for the health of the population but also for the stability of the economy, sustainability of our public services and the resilience of our communities. This session will provide some different perspectives on how this challenge could be met.”
Partnership working is key, says The Health Foundation: “We want to identify the enablers and barriers to a more preventative health care service that reduces health inequalities and partners with others.”
Trust
Countries around the world are holding elections this year. Already decided, alongside the UK, are Poland, France, Mexico and India. Trust is now a global issue – along with the impact of disinformation.
Among the PF Live panellists discussing this were Kelly Beaver, chief executive of Ipsos.
The market research and public opinion specialist recently published the What Worries the World survey and warned that satisfaction with the UK’s two main party leaders is falling among ethnic minorities.
CIPFA says: “We are facing a rising number of global interconnected shocks to our political and economic systems. All too often, it is the public sector that is left to pick up the pieces, delivering more with less, tackling corruption and dealing with an ageing and shrinking workforce.”
Ipsos says: “Inflation has been the number-one global concern overall in our What Worries the World survey since March 2022.”
Audit goes on
The most lively meeting at last year’s event was between finance directors and key people getting the Office for Local Government ready to go. A year later, consultations are under way but the audit backlog is still with us.
CIPFA says: “Whatever the cause, the current audit crisis and the prospect of disclaimed accounts will result in a loss of confidence in local authority accounting. It is no coincidence that the authorities most affected by the backlog are district councils, and, without longer term reform, there can be little confidence that a new backlog will not emerge. If we are to meet the needs of stakeholders, we need to take a pragmatic view of how we apply International Financial Reporting Standards, taking a proportionate approach that focuses on accountability for public funds and decision-making.”
Technology
How artificial intelligence will transform audit is the long-term question delegates will be considering. Are we just looking at a software programme or a more fundamental shift? There are opportunities but also a danger that it will just be used to reduce headcount.
NHS lead data scientist Dr Raphael Olaiya and researcher Dr Stephanie Hare joined us for a compelling discussion.
CIPFA says: “Is AI a silver bullet for productivity or a sticking plaster that ignores underlying challenges? Can data science, interrogation and AI transform our understanding of our communities, improve our processes and deliver better outcomes to the public?”
ICAEW says: “Depending on who you talk to, generative AI will either revolutionise how auditors work or replace certain roles entirely. The truth probably lies somewhere in between.”
Climate change
Another generation-defining isssue is climate change. The costs of meeting low-carbon targets are huge. But there’s also a developing issue of profiteering and criminal activity. The conference heard all about the new threat in sustainability work.
CIPFA says: “Climate change is seen as an existential issue, and large amounts of public investment are needed to support much-needed changes to global energy, industry, food and transport. It’s vital that support for anti-corruption programmes is prioritised.”
The Financial Conduct Authority says: “There is significant consumer interest in sustainable products and services. In our Financial Lives Survey (2022), 74% of adults agreed that environmental issues are really important to them, and 79% agreed that businesses have a wider social responsibility than making a profit. As the demand for sustainable products and services grows, so does the risk of ‘greenwashing’.
History repeating?
Before austerity, Manchester was the UK’s lead city on renewal, with regeneration, a vibrant culture and tech entrepreneurs leading the way.
The BBC moved to Salford to create Media City, and the Commonwealth Games were held there in 2002.
Since then, the public sector has been through multiple rounds of cuts, and the population is still dealing with the aftermath of Covid-19, plus the cost-of-living crisis.
Politicians say there won’t be a repeat of 1997, and public services can’t expect a deluge of central government funding. Professor Tony Travers told PF Live the same thing.
Sir Richard Leese led Manchester City Council from 1996 until 2021. He shared his thoughts with Harvard University: “It is often forgotten that we signed our first devolution deal in 2009 with the Labour government. That never came to pass, because of the 2010 general election, but the one thing that survived was the combined authorities.
“The biggest frustration is effectively the lack of continuity in national government. It’s not just a change of party control.
“Then there’s the inability, in general, of government to think long-term. It is due to the short-termism of national government and the complete lack of any joining-up between the different departments within the government. It was true when Labour was in government. It’s even more true now.”
Read Richard Leese’s interview with Harvard University at bit.ly/HarvardRichardLeese
