By Vivienne Russell | 3 July 2012
The finance function in the public sector is being held back by a lack of skills and resources, a survey by consultancy PricewaterhouseCoopers has found.
Three years ago, almost two-thirds of public sector finance directors surveyed by PwC predicted that, by 2012, the finance function would be operating at an important strategic level in their organisations. But this year just 4% said this had been achieved.The survey took in the views of 90 finance directors and professionals working across the UK in central government, local government and health. It sought to ascertain how the finance function manages itself, how it is perceived and how well equipped it is to manage future challenges.
The finance directors said that factors holding their departments back included lack of skills and resources, and the need to manage significant change at the same time, such as funding cuts and structural changes.
Organisational culture was also perceived to be a barrier to an ‘effective, efficient and insightful’ finance capability, particularly in central government.
One respondent said: ‘We need people who are adept at translating finance performance into business performance and vice versa’.
Commenting on the findings, John Berriman, government and public sector partner at PwC, said: ‘Six out of ten respondents now aspire for their finance functions to be high performing within three years, but the gap is so large that there is a need for some sort of reality check as to timescales.
‘There is still a huge amount of work needed to translate ambition and aspiration for the finance function to be seen as an insightful business partner, into plans, action and change.’
Eighty per cent of respondents agreed that increasing the influence finance had on their organisation was their biggest challenge. Overall, 30% of public sector finance directors’ time is spent on efficiency, 40% on compliance and control and 30% on providing insight. Only 7% rated their procurement activities as high performing; 10% assessed themselves as poor performers.
Of the respondents working in the NHS, more than a third (38%) said they were not at all confident of meeting their three-yearly cost savings target. This was significant increase on the 16% who said they were not at all confident last year.
Berriman added: ‘The finance function needs to reshape itself into a more insightful and agile business partner, fundamentally becoming a far more outward-looking organisation, seeking out and learning from the best in the public or private sector.
‘This needs the support of the public sector as a whole to develop and retain the finance professional of the future, if the ambitions for a broad finance transformation are to get traction.’
