Driving an efficient and effective finance function
Financial management in the public sector is complex. Multiple, sometimes conflicting, short- and long-term priorities must be addressed. Prudent budgets, managed borrowings and tax policies need to be balanced against support for economic growth, investment in infrastructure and increasing demands for public services.
Public sector finance managers constantly face tensions between short- and long-term financial priorities. Budgets, borrowings and taxation need to be balanced with support for economic growth, investment in infrastructure and increasing demands for public services. This is taking place in a climate of political and economic uncertainty and technological disruption.
Insights for this report have been driven through interviews with senior government finance in nine European countries (Austria, Denmark, Finland, Germany, Ireland, Luxembourg, Netherlands, Norway, and the UK). Insights from these discussions have allowed us to form a picture of recent and current challenges, priorities and opportunities.
The changing landscape of Public Financial Management
10 years ago, the EU economy experienced its steepest contraction in GDP, and faced substantial budget deficits and debts. Nowadays, public balance sheets are coming under control, however shifting expenditure demands on pensions and health and debt servicing requirements will continue carefull considerations from governments.
Challenges on economic, technological, regulatory and social issues, as well as internal challenges on strategy, operations and people require governments to adopt more innovative approaches.
Improving the impact of the Finance Function
Based on the interviews, a number of priorities to inform policy and support effective financial management in governments were identified.
- Improving decision support
- Balancing financial oversight with operational autonomy
- Generating further efficiency in the finance function
In the full report these challenges and priorities are further explained and substantiated by real life cases
3 key enablers for improvements in finance
- People: Finance teams need professionals with a range of strategic and technical abilities
- Digital: Tools as RPA, cognitive computing and analytics allow finance managers to move from routine manual processing tasks to add value from a strategic perspective
- The Business Case: to secure buy-in and sponsorship from the higest levels in government a strong business case needs to be builed highlighting the benefits of hange initiatives.
Want to know more?
This article is a summary of the publication Future Finance: Optimising management of the public sector finance function. You can read the full report. If you want to know more about this topic, please get in touch with Rob Dubbeldeman or Laudy Konings.