It is a difficult time for public sector organisations in many countries; there is little prospect of substantial spending increases for public services, public expectations are changing, and trust levels are plummeting. At the front line of all this are finance professionals – and a new ACCA report argues that their strong leadership holds the key to a better future.
Leading with purpose highlights the importance of finance leaders as public sector organisations address these complex challenges.
‘Effective leadership is vital if the public sector is to respond to this new landscape,’ says the report. ‘In the public sector, where organisations often have multiple objectives and functions, leaders can bring clarity and vision.’
The three ‘e’s
The report draws on extensive interviews with senior finance leaders in public sector organisations worldwide. In every region, the three ‘e’s – economy, efficiency and effectiveness, which together define value for money – determine the delivery of public services. But the public’s expectations of what their government should do, and how the public sector delivers services, are rapidly shifting.
‘It is clear that the public increasingly expects services to be tailored and personalised, in the way that they are in many other areas of life,’ argues the report. Many public services are already delivered online, ‘but there is still huge potential for digital technologies to be deployed in public service delivery’, as well as in back-office functions.
Expectation gap
A further challenge is the decline in public trust, prompted by the expectation gap between what the public expects and the services the public sector delivers. A 2024 OECD report found that 44% of respondents had no or low trust in national government.
‘There is a lot of information that could be powerful, but people are using it in silos’
Strengthening public trust ‘requires the public sector to be transparent, demonstrating accountability for public money’, says the report. It also requires public services that meet the diverse needs of the population. Finance leaders are at the forefront of delivering both fundamentals.
The report uses the input of public sector finance leaders to identify these five key principles for finance professionals in leadership roles:
- understand the changed landscape
- act with integrity
- use data better
- drive the sustainability agenda
- collaborate wherever possible.
Data concerns
On the question of data, the report argues that there is much greater scope for the huge amounts of data that governments and the public sector possess to be used more effectively. One finance leader participating in the project said that ‘there is a lot of information that, if it was held centrally, could be really powerful… But I think probably what’s happening is people [are using] it in silos.’
‘This is the first time in the history of sustainability reporting where accountants are on the main stage’
The report recommends that finance leaders should prioritise ensuring that systems can integrate data ‘to provide a comprehensive picture to improve decision-making’. Finance professionals have a personal responsibility to ensure the data they are accountable for providing is as accurate as possible, it adds, although the limitations of individual datasets should be understood and reviewed regularly.
Public services are not just about meeting today’s needs; this must be done without compromising the ability of future generations to meet their own needs.
Climate focus
An essential element in addressing climate change and sustainable development is the ability of finance leaders ‘to see the bigger picture and bring together different parts of an organisation’, says the report.
The report suggests three priorities for finance leaders on sustainability:
- Work with others to identify which areas of spending have the most significant effect on sustainability.
- Implement strategic approaches to budgeting to highlight areas for focus.
- Adopt sustainability reporting to bring greater transparency and attention.
Reliable sustainability information is an important element of building public trust and one finance leader working in central government identified the International Sustainability Standards Board’s first standards as ‘a game changer’ for accountants: ‘This is the first time in the history of sustainability reporting where accountants are on the main stage. We can be in the driving seat to prepare sustainability reports.’
Finally, the report cites collaboration as a key principle for finance leaders – and stresses that this means collaboration internally, with other public sector bodies, and with the wider private and voluntary sectors.
‘Building and retaining the public’s trust are absolutely critical’
Strong governance, particularly when working with external partners, is essential: ‘Finance leaders need to be clear about the contribution a partner can bring, ensuring they can provide expertise or resources that would not otherwise be readily available.’
The report concludes: ‘As public services evolve, building and retaining the public’s trust are absolutely critical if they are to succeed in delivering their objectives. Finance professionals are at the heart of ensuring the foundations are in place for public trust.’
More information
The highlights of the Leading with purpose report are being discussed at ACCA’s Virtual Public Sector Conference. Register to watch on demand
