The way public services are delivered is undergoing fundamental change. With its strategic and entrepreneurial skills, the finance profession has a crucial role to play
This article was first published in the February 2017 international edition of Accounting and Business magazine.
We are all well accustomed now to hearing that we are living through one of the most disruptive and extended periods of change, but it is often difficult to quantify exactly what that means for each of us in our working lives.
Accountants working in the public sector across the globe have been dealing with unprecedented levels of disruption as demographics, economic unpredictability and political upheaval combine to radically alter the way public services are delivered. Some of these – such as an ageing population – will affect the level and type of public services that will be needed while others – such as economic factors – will affect the availability of funds in the sector.
But there are other forces at work: digital technology, together with the blurring of the boundary between the public and private sector as governments explore outsourcing and partnerships with private companies, is also fundamentally changing the nature of the public sector and the demands placed on finance professionals working within it.
In light of the extent of this change and the many influences involved, ACCA has recently undertaken a significant and detailed global study to identify the major factors that are driving change in the public sector. Its resulting report, 50 drivers of change in the public sector, also discusses the likely timing of these drivers and how they may shape the future.
The ultimate aim of this work is to help professional accountants and leaders in the public sector prepare for the future by identifying the skills and experience that will be needed to support the delivery of excellent public services worldwide.
The study – which included 12 detailed roundtable discussions held in 11 countries across the world – identified the 50 most important drivers of change across eight areas of relevance: economy; politics and law; society; the business of government; science and technology; environment, energy and resources; the practice of accounting; and the accountancy profession.
Unsurprisingly given the current environment, the level of economic growth was ranked as the top driver for the public sector. However, the survey was most enlightening in the way it revealed the changing nature of the delivery of public services across the globe.
This is due in part to the political environment, the report explains, and the tendency for more public services and support services to be outsourced: ‘The public sector is evolving to deliver services in the most effective way within the constraints of available public finances.’
Significantly, three of the top five drivers of change relate to the way in which government organisations conduct their business. Meanwhile, the availability of talent was also an issue across the globe. ‘The public sector is often unable to compete with the private sector for talent, so fails to attract and retain the people it needs to help modernise public services,’ says the report.
Emerging economies are actively encouraging their young people to return home after studying abroad and use their talents for the benefit of their own country, it adds, which could prove significant in the near future. Talent shortages was rated most highly as a driver for change by respondents in Asia Pacific (49%) and South Asia (44%), compared to 26% in Western Europe – probably due, says the report, to Europe’s ability to attract talent from other regions.
The report also highlights the rise in the number of public-private partnerships across the globe, albeit it at varying pace. This raises the important role professional accountants can play in this changing landscape, in monitoring and assessing these increasingly complex arrangements. ‘Adequate governance arrangements in these commercial agreements will be paramount for maintaining control and accountability for the use of public funds,’ says the report. ‘The finance professional in central, federal, state and local government will need a blend of commercial acumen and entrepreneurial skills to be able to manage these relationships effectively and explore innovative ways of obtaining better value for money in public services.’
Bringing skills to bear
The report outlines in detail the critical role that finance professionals are playing in the public sector, and how the demands placed upon them will change. ‘There is an overwhelming case that the public sector will require more accountants, but they will be now be required to fulfil the growing need for accountability and transparency, as well as providing better insights to help public-sector organisations meet future needs,’ it says. ‘Public sector accountants are being asked to take on a broader strategic and entrepreneurial role – as they are now becoming the bridge between the public and private sectors.’
The report details the skills that professional accountants will need as the public sector becomes leaner and more citizen-focused, and makes greater use of technology and big data. Strong technical skills will be a must, says the report, and so too will good professional judgment in the analysis of financial and non-financial data to create meaningful insights. ‘In a public-sector context this is even more of a challenge than elsewhere,’ it continues, ‘as it is not easy to assess the impact of government spending in a linear or strictly numerical way.’
Professional accountants will also need to ‘find their voice’, says the report, and question processes when there is an opportunity to make improvements: ‘As the public sector increasingly operates in a commercial and business-like manner, the professional accountant will need to develop a strong understanding of how financial decisions interrelate with strategic and operational priorities.’ Governments will need and value accountants who have not only strong negotiating skills but also an ability to see the big picture and take a forward-looking approach.
Stephen Emasu, chair of ACCA’s global forum for the public sector, sums up the challenges facing the public sector in his foreword to the report, but also stresses the essential role that professional accountants will play: ‘This is an exciting time to be a professional accountant in the public sector. It is a huge opportunity to shape the public services of the future, achieving value for money and long-term sustainability.’
Liz Fisher, journalist
"This is an exciting time to be an accountant in the public sector. It is a huge opportunity to shape the services of the future"