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Revolution from within

A revolution is taking place in local government today, not just within the UK but globally

September 2018

A revolution is taking place in local
government today, not just within the
UK but globally. Organisations are
responding to the pressure to ‘do more with less’
by transforming the way in which they deliver
public services in every area of operations, from
back-office administration through to front-end
online services.
For local government finance professionals,
this revolution presents both opportunities and
challenges. On the one hand, they get to
enhance their role as business partners by
advising on major transformation initiatives. On
the other, they are tasked with helping their
organisations to deliver more services to more
people, with less central funding, against a
backdrop of widespread organisational and
technological change. So how are they
responding?
The short answer is that they are transforming
themselves and their organisations by finding
and supporting new models of service delivery,
financing and organisational structure. This is
according to a new report by CIMA and CIPFA,
entitled ‘Transformation: How finance teams are
driving local government transformation’. The
report highlights the top five transformation
challenges facing local government as: getting
people to adapt; securing budget; determining
the cost benefit; finding the right skills; and
deciding where to focus efforts. Finance
professionals can play an important role by
communicating insights that support better
decision-making and drive actions in all these
areas. They can also support the development of
alternative delivery models by reviewing
outsourcing and private finance initiative
contracts and identifying new and different ways
to invest and build. Furthermore, the research
found that the finance function has an
increasingly important role to play in measuring,
tracking, demonstrating and communicating the
long-term value of proposed investments
associated with transformation.
Featured in the report are some inspiring case
studies of local government transformation
initiatives, which have been supported by
proactive finance teams. One is Cheshire East
Council, which set up its own limited company
to deliver transport services while meeting
savings targets. The company has consistently
outperformed its financial plan through
measures such as simplified procurement
procedures, replacing the ageing council bus
fleet with contract hire vehicles, and generating
extra business from schools and other public
agencies. It saved more than £809,000 in the
first 15 months alone.
Another great example is the Peterborough
Social Impact Bond, which was launched in
2010 to help rehabilitate short-sentenced
prisoners at Peterborough prison. The bond paid
for interventions aimed at reducing reoffending
on the basis that if reoffending fell, investors
would receive both their initial capital back plus
a return for taking a financial risk. In the case of
Peterborough prison, reoffending was reduced
by 9% over seven years.
Then there is Co-operative Home Care (CHC)
in Australia, an example of an employee-owned
or ‘mutual’ model of public service delivery. CHC
provides high-quality homecare to elderly,
disabled and chronically ill people. Its success
can teach other public service mutuals some
lessons in the importance of good financial
management and seeking out diverse sources of
capital.
These case studies demonstrate how local
government finance teams around the world
have evolved from being record-keeping support
functions into business partners that work
closely with colleagues and stakeholders across
and beyond the organisation. Thanks to their
strategic focus, technical knowledge and
practical expertise, finance professionals are
emerging as key players in the sustainable,
affordable delivery of public services, both now
and in the future.
For more and to download the report go to
https://tinyurl.com/y6w6u7t5

• Rebecca McCaffrey, CPFA, FCMA, CGMA

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