News from the CIPFA annual conference, which was held in Brighton on June 1719

26 Jun 08
Better use of public sector assets will form a vital part of the operational efficiency programme due to be launched by the Treasury within weeks, Yvette Cooper told the conference.

27 June 2008

Fixed assets will be essential to new efficiency drive, says Cooper

Better use of public sector assets will form a vital part of the operational efficiency programme due to be launched by the Treasury within weeks, Yvette Cooper told the conference.


The chief secretary to the Treasury made it clear to delegates on June 19 that public bodies will come under growing pressure to deliver efficiency savings from their fixed assets.


The proposals form part of the next stage of the government's efficiency programme, under which public sector bodies already have to make £30bn in cash-releasing savings over the next three financial years.


The OEP will make 'across-the- board savings that draw on both public and private sector expertise', the minister said. Areas under consideration include procurement, IT and back-office functions, alongside the public estate and property.


'Why have so many travel or utilities contracts in one organisation, when there is room for collaboration?' Cooper asked.


The Treasury is preparing a report for next year's Budget which will look at how to make better use of £800bn worth of public sector assets.


These include property controlled by the NHS and schools, as well as Ministry of Defence and other land assets.


New programmes of work will be developed over the next 12 months that will feed into the next Comprehensive Spending Review, expected some time in 2009, she said. The current decline in property values should not deter organisations from maximising the value of their assets.


Cooper also stressed the need to 'empower staff across the public sector' to take on bureaucracy and improve efficiency.


Olympic legacy defended amid slump fears


The 2012 Olympics will provide lasting improvements in east London, senior staff involved in the Games said last week, as the economic climate placed a further strain on funding.


David Goldstone, director of finance at the Government Olympic Executive (part of the Department for Culture, Media and Sport), said: 'Three-quarters of the spending& is an investment that will leave a long-term legacy, investment that would have been an important part of a regeneration programme if we didn't have the Olympics at all.'


Goldstone said no-one expected there to be changes to the overall £9.325bn budget, which includes a contingency fund of more than £2bn.


Asked about Sydney's failure to find uses for Olympic venues after it hosted the Games, Goldstone said that legacy was central to the planning process in London, which had not been the case for previous Games.


Andrew Travers, director of resources and risk at the London Development Agency, told delegates that all the organisations involved were in agreement on developing the site in a long-term, sustainable way.


Lord Coe, chair of the London Organising Committee for the Olympic Games, told the conference's closing session that fears over rising costs were unfounded. 'The costs aren't out of control. The National Audit Office audited& the costs, which have come in pretty much as predicted,' he said.


He was 'delighted' the games had triggered the public investment in that area of east London, which would bring about its regeneration and leave a lasting legacy long after 2012.


Questions over the amount of public money going into developing the Games on June 20 when the property developer Lend Lease, the Olympic Delivery Authority's private sector partner for building the Olympic Village, issued a statement saying it was taking longer than expected to raise funds for the project due to 'current market conditions'.


The company expected to have debt funding in place by the end of the year, it added.


The ODA said there were ongoing discussions about the level of public money that would go into building the houses in the village, but work on the site had begun. A spokesman said: 'It is possible, given the economic situation, that more public investment may be needed.


'However, this would be within the existing £9.325bn budget for the Games so it is incorrect to say that taxpayers would pay more.'


He said the ODA remained confident that the development could deliver returns when the homes were sold after the Games.


The statement from Lend Lease followed publication of a progress report on the Olympics by the NAO, which said uncertainty in the financial and property markets was creating difficulties raising private money for the village.


Officials crucial in poverty fight, says aid expert


Ensuring that public officials in developing countries are properly motivated and resourced is a vital element in the fight against global poverty, an expert in the field told the international seminar.


Mark Lowcock, director general for country programmes at the Department for International Development, said the effectiveness of aid depended on strong, accountable institutions in poorer countries. 'A core requirement is [ensuring there are] capable, effective individuals who are adequately paid and motivated in these institutions,' Lowcock said on June 17.


A deal signed with CIPFA to boost financial governance in the developing world would help nurture capable, committed staff in major institutions, he added.


'Public financial management in poorer countries is, typically, quite bad but it's improving and improving fast. [The agreement with CIPFA] is one of the best weapons that we have in our armoury to achieve our public financial management goals.'


International aid had already brought dramatic improvements to living standards, Lowcock told the seminar.


'More people have been lifted out of poverty in the past 20 years than in the whole of the past 500. Aid has contributed to this success,' he said.


CIPFA international director Caroline Rickatson said: 'We know full well that improving public financial management in the developing world, in particular, can generate more money for investment in vital public services, and make a major contribution to poverty reduction.'


PAC chair: scrutiny must not go too far


The chair of the Commons Public Accounts Committee has said accountability mechanisms for the public sector should not become too far-reaching.


Referring to any future changes to the role of the National Audit Office in a speech to the conference, Edward Leigh said accountability helped contribute to improvements in public services.


'I also believe there is a limit. You've got to allow public service professionals to get on with it. You don't want people looking over your shoulder all the time,' he said.


However, Leigh, Conservative MP for Gainsborough in Lincolnshire, was critical of the lack of financial scrutiny in Parliament. He told delegates there was a need to 'make select committees much more powerful' and to create a budget committee to scrutinise government spending plans.


'There is virtually no financial scrutiny in Parliament. We need a budget committee like the American budget committee.'


Leigh told delegates that despite having a Labour majority the PAC had never voted on a report.


Survey suggests financial optimism


Half of public sector finance managers believe there have been great improvements in financial management over the past three years, according to preliminary survey results revealed at the conference.


The survey of almost 500 finance professionals from all areas of the public sector was carried out on behalf of CIPFA by YouGov. It is the most comprehensive study of its kind in recent years.


Two-thirds of respondents identified clear performance targets as the single biggest contributor to the improvement in financial management. Almost half said that improved performance flowed from better financial management skills.


The greatest challenge for the future was identified as integrating financial and performance information to give boards and managers a more complete view of their business.


Ian Carruthers, CIPFA's policy and technical director, said: 'It is clear from this survey that the improvements in public sector financial management have taken place right across the board.'


Clarity call on flood funds


Government should be clear on how much funding it is willing to give councils to help cope with disasters such as flooding, the Audit Commission's head of research told delegates.


Diane Ridley said local authorities were being hindered by central government's failure to state in which circumstances it was prepared to intervene and how much support it would provide.


'I think what would help would be some clarity, so everyone knew just how bad does it have to get and how much help will there be. Then they can make sensible decisions about risk planning,' she told the conference.


The Audit Commission's December 2007 report on last summer's floods revealed wide variations between authorities over the costs they had to bear. The conference also heard from Peter Antill, head of resources at Tewkesbury Borough Council. The town was badly affected by the flooding.


'We did pretty well, but there was a lot of decision-making on the hoof,' he said.

 

PFjun2008

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