Management of spending versus cuts: CSR 2010
What we know
Government has said that finance leaders will play a central role in delivering the austerity agenda. It also confirmed (PDF) it will seek to: “strengthen and re-position the role of the departmental finance director as an enabler of informed decision making at Board level.” This work will be made more complex because it may include restructuring, reorganising or downsizing the finance function itself, for example through shared services.
This convergence of responsibility places public sector financial managers under significant pressure in two ways. First, immediate cashable efficiency savings are needed over a short period. Finance Directors will be expected to lead on both the identification and prioritisation of areas for savings and on the monitoring of implementation. A deep understanding and analysis of organisational costs will be critical here.
Secondly, different priorities require fundamentally different capabilities from within finance teams. To close a standalone defence capability programme raises different issues from say, reforming a series of interdependent business processes in a complex department such as HMRC.
There is already a substantial UK market for public sector asset disposals, with £18.5 billion worth of sales between 2004-05 and 2006-07 against the government’s target to realise £30 billion by this financial year (PDF). Spending Review highlighted Royal Mail, NATS, Student Loan Book and the Tote as potential sales, but we know that more will follow, particularly across the government’s estate.