Innovation and changeDigital TransformationLocal governments need to take a smarter approach to transformation

Local governments need to take a smarter approach to transformation

Councils must transform to make every pound work harder, but need the right skills, capabilities, technology and organisational knowledge to succeed, new report says

Despite facing increased pressure to deliver more services to more people, local government budgets have been reduced by 50% since the 2008 financial crash. With few signs that either the Autumn Budget or the Spending Review will provide significant respite, councils need to change how they operate.

Transforming organisations and the services they deliver is essential for long-term sustainability, and finance teams must be front and centre to these decisions, according to a new report by the Chartered Institute of Management Accountants (CIMA) and the Chartered Institute of Public Finance and Accountancy (CIPFA).

Transformation: How finance teams are driving local government innovation is the result of a long running collaboration between the two accountancy organisations. Using expert insights and local government transformation case studies, the report sets out the scope of and capabilities councils need for successful transformation, from finding and supporting new models of service delivery, to new financing and organisational structures. The report is particularly relevant as finance professionals in local government organisations are embracing a new, more strategic role.

Rethinking services

The report contains insight in to what makes for successful transformation. CIMA-funded research into local authority resilience before and after the 2008 crisis identified the following approaches to rethinking services:

  • Adopting priority-based approaches, with a focus on expected outcomes. This required organisations to:
  • Systematically review the affordability of non-statutory services
  • Stop providing some non-statutory services
  • Challenge the quality of remaining services
  • Partnering solutions, in which third-sector and private organisations are encouraged to take on responsibility for providing some services
  • Joined-up-services, through collaboration with other public-sector entities and an increasing emphasis on pooled budgets and strategic alignment
  • Co-production, where citizens are involved in developing and/or delivering public policies and services.

CIPFA has also outlined six critical success factors that organisations must address if their transformation initiatives are to achieve their stated objectives.

Local governments need to take a smarter approach to transformation

CIPFA Chief Executive, Rob Whiteman, said: “Transformation isn’t just about installing shiny, new tech. It’s about looking at an issue and thinking creatively about solutions. It’s about understanding the challenges and risks; and ensuring the skills, capabilities and capacity to achieve it is in place.

“Fiscal constraints are certainly an important incentive for transformation, the goal is doing more with less, but investment is also a challenge, which means it’s crucial that finance teams are leading these initiatives.”

Andrew Harding, FCMA, CGMA, Chief Executive – Management Accounting at the Association of International Certified Professional Accountants, said: “As finance professionals, we translate numbers into relevant, understandable and actionable business insights to deliver better services and lead the way for better decision making. We do this by developing a broad knowledge of operations, joining the dots in the organisation and taking into account the public interest.

“Local councils need to make sure that they have the right finance teams and skills in place. It is therefore essential that they devise long-term talent strategies to create a higher performing and engaged workforce to drive organisational changes and deliver sustainable growth.”

the full report can be read here.

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