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With the new government in place, the first priority is to reduce the budget deficit and put the country on a firmer footing. Finance expert, Charles Tilley, tells Heather Jameson how this will require a different way of public sector working Now the new coalition government is starting to take shape, and has put forward its plans for the future, all eyes will be on the top job in hand – trying to deal with the economy in the coming months and years ahead, and rebuilding the country to be as successful and efficient as possible. For the public sector, this will mean a radical shift in attitude. Local government is already trying to reposition itself as the delivery arm of the Government’s plans, to take the burden of local issues back to a local level, while central government gets on with tackling the national economy. But central government will have to bear the brunt of a radical shift in the way it operates if it is going to meet the challenges ahead, according to the head of an international accountancy association. Charles Tilley, chief executive of the Chartered Institute of Management Accountants (CIMA), is adamant the Government – and the rest of the public sector – will have to rise to the challenge in order to deal with the financial crisis. And there is a lot the public sector can learn from its private sector counterparts, he claims. Mr Tilley tells The MJ the Government will need to have a more robust approach to performance management, clearer objectives, and powerful leadership, if we are going to survive the fiscal problems ahead. ‘Somebody needs to step up to the plate and address the issues this country faces,’ he says. ‘Successful organisations are those which are well governed and have good performance management in place.’ He says the challenge ahead is to ‘make sure the cuts are the right cuts, and not just salami-slicing’, which will do nothing to meet the massive budget deficit or set the country on a firmer financial footing for the future. And, he claims, finance directors will have to be central to the process. Under current structures within central government, financial directors in government departments don’t always have full board membership, or the associated accountability that comes with it. He claims putting the money men on the top table enables greater financial control in an organisation. The Government manifestos may give us a clue what type of government we have elected, and the basic principles to which its members will adhere. However, Mr Tilley claims the manifestos don’t ‘provide a blueprint for a successful UK’. They are a list of inputs, rather than a list of outputs the parties would like to see. As a result, he claims, the Government, and the public sector as a whole, lacks the strategic vision to move the country forward. Shifting the balance from inputs to outputs would also help switch from the current silo-based government, which hampers change on the ground – an issue which is keenly felt in local government circles, where people on the ground must deal across government departments. Mr Tilley describes the current financial crisis as an opportunity for the Government to rethink its entire approach to managing the country, and a chance for the public sector, as a whole, to recalibrate the services the public want and are willing to pay for, and get rid of the services which are surplus to requirements. ‘For me, it is a complete change in the way the Government looks at things,’ Mr Tilley says. He admits running the country is far harder than running a business. ‘The private sector has a simpler focus. It’s about driving the long-term sustainability of the business. It is much harder in the public sector. What is a successful UK is much harder to define.’ In order to recognise success, the Government must set out what it wants to achieve, and have a clear vision for getting there. Performance management, he claims, will be important, and that is not something he currently sees within the civil service. ‘There is a lack of performance management expertise in the civil service. Local government is much further ahead than central government. Local government has its chief executive, which helps.’ He claims the current system of incremental change is no longer an option, with the challenges ahead, but he says finance directors will have a key part to play. ‘One of the easiest things to do as a finance person is to cut costs. But it is about cutting the right costs and investing in the future.’ l As an association, CIMA has more than 170,000 members worldwide across the public and private sectors. Mr Tilley was speaking to The MJ before the Government announced its plans for £6bn savings earlier this week. The association is due to publish a report next month, which will outline what it believes the public sector should be doing to improve its leadership and meet the challenges ahead. The report will be available on its website, www.cimaglobal.com.

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WHITEHALL

Getting the UK finances back on track

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