Trust and Resilience – the role of public finance
People around the world rightly expect their governments to provide public services and manage public money in a prudent and transparent way. Although the scope of public services and government budgets vary from one country to the next, these ideas are nevertheless integral to the social contract that exists between a state and its citizens. But what happens when government affairs become opaque? When accountability and ethics fall to the wayside? The resulting trend is increasingly important in the global sphere – weaker public trust and less resilient institutions. Research shows us that trust in public institutions today is at an all-time low. Recent research from Ipsos MORI found that in Great Britain, local councillors are actually less trusted than bankers.
As the professional accounting body for people in public finance, CIPFA stands up for sound public financial management and good governance. We see strong financial management in the public sector as a means to strengthen public trust and repair issues of resilience. While this is a nice thought, it’s often less clear what that looks like in a practical sense for those working in public finance. Put simply, it comes down to one word: culture. Upholding cultures of accountability, ethics and resilience is a key responsibility often left out of our public accountants’ job descriptions.
For those of us in the public sector, ethics have to be at the forefront of what we do. CIPFA’s 2018 Ethics Survey showed that nearly 60% of public finance professionals have felt pressure to act unethically at least once in their career, with supporting excessively optimistic budgets and unreasonably downplaying risks cited as the most common pressures. Ethics are inherently part of our profession, they play a vital role in to the way we work and how people perceive the work that we do.
Funding, demand and pressures all change. However, the one thing that cannot change is the focus on ethical decision-making. And while we can codify ethical requirements, standards are only as effective as the professionals putting them into practice. The responsibility lies with each and every one of us to drive a culture based on ethical actions, leading in turn to higher levels of public trust.
But it is not simply acting ethically that matters. The public must be able to see that we are acting ethically and spending public money in their best interests. Today, government departments and local authorities report a vast amount of information with to the aim of being more transparent. But the sheer amount of data shared across pages and pages of financial statements can seem impenetrable at first glance. To combat this, we in the UK public sector have started to think about how we can streamline and simplify public financial information to make it more accessible and easier to understand. It should be easier for the public to understand how their taxes are being spent, ask questions and make informed decisions as voters.
As a result, CIPFA recently formulated new guidance on streamlining public accounts. A simplification, and often shortening, of public accounts can mean that vital information is easier to find, easier to produce, easier to compare across authorities and fewer reporting errors are made.
It’s a crucial initiative that works to hold public finance professionals accountable and ultimately can work to build public trust. If the goal is to increase engagement and understanding among the citizenry, we think this is a very practical place for many authorities to start. While this exercise is important in the public realm, transparency and consistency are equally important within organisations. It’s critical that the sector moves towards a sense of collective responsibility.
As with any organisation, a change in culture can be difficult. But at CIPFA we’re firm believers that it doesn’t have to be. Adequately training the public sector workforce, implementing governance controls across an organisation, holding public finance professionals to account and following sector wide standards can send a strong signal to the public that ethics, accountability and financial resilience are at the core of what we do. Every public finance professional will have to play their part in creating meaningful change, and we’re here to support you along the way.
 Rob Whiteman is the Chief Executive of CIPFA, the Chartered Institute of Public Finance and Accountancy. CIPFA is the only professional accountancy body in the world exclusively dedicated to public finance, working with donors, partner governments, accountancy bodies and the public sector to advance public finance and support better public services.
Rob was previously a senior civil servant in the Home Office as the Chief Executive of the UK Border Agency responsible for border security and immigration. Previously he worked as the Managing Director of the Improvement & Development Agency (IDeA), Chief Executive of the London Borough of Barking & Dagenham and Director of Resources at the London Borough of Lewisham. He is Technical Adviser to the Board of the International Federation of Accountants (IFAC) and is a well-known international speaker and commentator on public financial management and good governance. |