Drivers of change in the public sector

Understanding what to expect in the future is crucial to ensuring finance leaders in the Caribbean can lead effectively.

Economic growth, quality and availability of the global talent pool and business leader’s responsiveness to change are among the top three drivers of change in the public sector globally says ACCA (the Association of Chartered Certified Accountants) in a new report.

Drivers of change in the public sector uncovers a total of 50 key forces that will affect the global public sector landscape between now and 2021, which encompass challenges from governance and strategy through to operations and talent development.

Using global survey responses and data from roundtable discussions, the report focuses exclusively on identifying the key factors that will change in sector and to assess how they will shape the future, with ACCA asserting that global changes will have a local impact and governments will need to be at the forefront of tackling their effects.

Economic growth unsurprisingly leads as the top driver of change globally, crucially because it’s a key measure of a nation’s health and prosperity. Respondents from Western Europe and Asia Pacific rated this issue particularly highly. Secondly, respondents considered the global talent pool to be the second most critical driver for the public sector, which echoed particularly strongly by respondents in Asia Pacific region who ranked this most highly (49%) followed by South Asia (44%), North America (41%) and Africa (36%). Attracting people with the right skills is a long-term challenge for the public sector throughout Africa and sustained efforts will be required to close the ‘talent gap’ globally.

Thirdly, business leaders’ responsiveness to change and disruption is also crucial as organisations are generally defined by the qualities of their leaders. People and their ability to lead will always be the key to unlocking organisational value, something that respondents in North America, South Asia and Africa rated particularly highly.

Each driver was assessed against eight categories: economy, politics and law, society, business of government, science and technology, environment, energy and resources, the practice of accounting and the accountancy profession to determine the likely and timely impact they will place on the sector.

Collectively these drivers of change are making the public sector environment more fluid and forcing it to evolve. Today is an exciting time to be a professional accountant in the public sector. There is a huge opportunity to help shape the public services of the future, achieving value for money and long-term sustainability. Arguably, there are few other areas that provide the diversity of challenge and fulfilment found in the sector. To perform their roles well, public sector finance professionals need to be able to navigate the present and prepare for the future to ensure that the best value is obtained from public funds. This also echoes our professional accountants - the future research which laid out the skills needed by future employers.

Governments and finance professionals must work together to ensure public services are fit for the future. Their partnership influences how the funding is used to address national and local priorities, the availability of resources for investment and the effectiveness of public services. Finance professionals play a pivotal in promoting public confidence and trust in the stewardship of public finances as they navigate through operational, governance and risk management issues.

This is public financial management and good public financial management instils trust. Trust is created when the public are able to understand how their money is spent, and on what.

To ensure that the public is able to hold public sector organisations to account, this information needs to be understandable, accessible, clear and timely. Practices of disclosure and reporting, whilst retaining accuracy and precision, should be communicated with their interests firmly in mind. Financial management in the public sector must also strive to ensure that the public receive the best possible service.

Like other organisations, finance professionals need to be efficient to identify and mitigate financial risk. An efficient department means that financial planning, monitoring and control are integrated in performance management, so that there is a strong emphasis on budgetary control, reporting and decision making.

Another is to ensure that budgets are effectively linked to policy objectives and that value for money is secured, as well as to improve the credibility of financial reporting.

Given the pace of change and size of expenditure, it is critical that finance professionals working within the public sector are equipped with the right skills to deal with the challenges ahead.

Professional accountants in the public sector finance function will need to adapt to these prevailing winds of change by honing in on their technical and specialist skills, as well as developing new attributes, in order to meet emerging challenges and make the most of fresh opportunities.