Public finance heads positive about funding and procurement innovation in the face of expected cuts, claims CIPFA-Civica survey
Nearly all finance directors under pressure to deliver efficiency savings; majority ‘well placed’ to deliver procurement savings

London, June 23, 2009 - More than four out of five public and third sector finance directors expect new Gershon-type efficiencies and just over half think local grants will be cut, according to a new study¹ from the Chartered Institute of Public Finance & Accountancy (CIPFA) commissioned by Civica, a market leader in software-based solutions that help organisations to improve service delivery and efficiency.

The online study of 129 finance and resource directors across UK central and local government, health, police, education, housing and charities, conducted earlier this month found that:

• Nearly all respondents - 93% - said demands for efficiency savings and value for money was their most pressing agenda item
• Almost three quarters - 74% - were experiencing increased pressures to deliver results but also maintain services
• Most public sector bodies - 83% - think that a new government elected next year will introduce further Gershon-type efficiencies over the next few years
• Just over half – 54% - believe local funding settlements and grant entitlements will be reduced
• Just under half (48%) also believe that there will be a further round of sector re-organisations to reduce costs
• Nearly half (46%) think public sector pensions entitlements will be reduced.

The picture could be no better by the time of an incoming government, with 41% - of public sector bodies polled believing that economic confidence will be the same at the time of the next general election but slightly more - 43% - believe it will be worse than now.

Responses indicate that where public sector organisations – a large proportion of which were local authorities in England - were being asked to respond in a structured way to the Government’s Transformation Agenda, nearly half – 45% - of these bodies said they have introduced service modernisation plans, while over four out of ten (43%) had adopted business process re-engineering to meet this ‘transformation’ requirement.

However, finance professionals think that innovative approaches to service delivery partnerships, procurement and funding could help sustain local service resilience in the face of these pressures.

Asked for the main ways in which they could innovate to relieve pressure on their organisation and services, majorities stated that they were examining, respectively, process redesign/re-engineering methods (68%); greater partnership working (66%); new service delivery structures (64%); and procurement innovation (56%). In addition, a majority – 57% - said they were ‘well placed’ to build the sort of partnership structures that will help develop procurement savings.

Survey respondents are also rethinking the funding of services, to reduce dependence on central government. Four out of ten (40%) of those polled want the reinstatement of local taxation powers; over one third (37%) supported new types of public-private funding such as ‘reworked’ PFI; 38% believed they should raise funds locally; and over a third (37%) thought mutual funds for capital projects would help.

The row over MPs’ expenses may have harmed trust in public servants but responses suggest this is counterbalanced by the level of scrutiny they are under. Nearly half of respondents - 46% - said there was some evidence that trust in public servants had affected them, although 21% said there was no evidence of this at their organisation. Nearly three-quarters (74%) said that their use of public resources was subject to existing scrutiny / audit processes and over one third (36%) were already required by the Government to provide evidence of value for money.

Ian Carruthers, Director of Policy & Technical at CIPFA said: “Finance professionals are clearly under enormous pressure to deliver value for money while maintaining the integrity of local services. They clearly expect the situation to get worse over the next few years. The survey shows they are examining innovative approaches to the funding and the delivery of services to help ‘square the circle’ in the future.”

Tom Lane, Financial Systems director at Civica said: “The Operational Efficiency Programme has identified ‘breakthrough’ savings of £6.1 billion of savings a year by harnessing the public sector’s collective buying power and by streamlining procurement processes. In addressing targets while maintaining vital local services authorities and their partners will need to demonstrate real leadership. This survey indicates that finance professionals are coming up with practical ideas that will help to deliver procurement-based savings, whether through wider and more effective frameworks or rethinking funding for innovation across the sector and its partners.”


Notes to editors
¹ CIVICA-CIPFA Procurement and Service Innovation Survey 2009; During the first two weeks of June 2009, 129 public sector Finance Directors replied to a joint CIPFA-CIVICA online Procurement and Service Innovation Survey, of whom 80% were CIPFA members.

About Civica
Civica Group Limited (www.civica.co.uk) is a market leader in software-based solutions that help organisations to improve service delivery and efficiency, with specialist expertise in local government, social housing, enforcement, education and regulated markets. Blending consulting, software and managed services, the group supplies more than 1,700 customers in the UK, Australia, Singapore and the USA, including 90 per cent of the UK’s local authorities.