I am writing to outline ACCA (the Association of Chartered Certified Accountants)’s priorities for the Autumn Statement and Spending Review.
ACCA has recently concluded a wide-ranging consultation with our members operating at senior levels across all parts of the public sector. Our consultation focused on the priorities of public sector decision-makers ahead of the Spending Review and Autumn Statement.
Our members’ concerns are grouped into three key themes focused on: promoting long-term stability; instilling a culture of strategic thinking; and committing to investment in digital capability.
These recommendations are outlined in further detail below:
1. The government must commit to a longer-term stability for public sector finances.
Short-term planning and budget allocation is not conducive to delivering efficiencies in the sector in the longer term. Annual budget allocations and spending plans encourage a “spend it or lose it” attitude which does little to promote longer-term strategic thinking. Three to five year commitments on budget allocations will enable financial managers to make long-term strategic decisions which are far more likely to deliver value for the taxpayer.
2. The government must approach funding for public services in a more strategic and holistic manner.
“Salami slicing” of public service funding has been prevalent in recent years and has brought about unintended consequences, not least in bringing about a culture of siloed working and thinking.
Instead, government should focus its budget allocation on desired service delivery outcomes (which may cut across departmental remits), and resist the tendency to slice budgets across individual departments. A cross-governmental approach would promote greater collaboration, reduce duplication of effort and drive up efficiency in service delivery.
3. Regional control over public sector finances needs to be accelerated.
The government’s approach towards devolution is to be commended, but more must be done to give local and regional authorities more control over local budget setting and spend. This will enable devolved cities and regions to prioritise spending to address local challenges.
However, the risk of devolved spending creating a “postcode lottery” should be mitigated through the development of a set of minimum standards for core public services, such as health, care and education.
4. The digital capability of the public sector needs to be greatly improved.
A lack of investment in IT infrastructure has left a legacy of systems that are fragmented and ineffective. The government should prioritise investment in digital services in order for the public sector to deliver efficiency savings in the mid to long term.
Investment in training and development is also required to drive-up digital capability and capacity across the public sector. Our members have raised serious concerns with regard to further spending reductions impacting negatively on capacity; this could delay or prevent the delivery of digital services which aim to enhance efficiency across the sector.
5. Greater innovation in the public sector will be key to delivering efficiencies and maximising value.
Government spending should therefore place a greater emphasis on outcomes achieved versus process adherence which will in turn help to drive up innovation in the sector. Again, a shift away from short-term budget setting will support this.
I would very much welcome the opportunity to discuss further how ACCA can support you and the work of HM Treasury in the years ahead. Please feel free to contact me should you have further questions or comments.