NORTHERN IRELAND FINANCE MINISTER SAYS INNOVATION IS NEEDED BOTH IN FINANCE AND POLITICS TO HELP THE PUBLIC SECTOR

Public sector reform is needed to combat austerity concludes ACCA’s (the Association of Chartered Certified Accountants) international public sector conference

A reform of public sector services is needed to deal with the pressures of austerity measures and to manage the politics of finance – cutting services alone is not enough. That was the key conclusion of the sixth International Public Sector Conference, held by ACCA (the Association of Chartered Certified Accountants).

Held at the Inmarsat Conference Centre in London, the keynote speaker at this year’s conference, entitled Putting politics into finance, was Northern Ireland Finance Minister Simon Hamilton.

Simon Hamilton said: “Financial information sets the context and underpins political decision-making for the Northern Ireland Executive’s Ministers.

“The tightening public spending environment provides an opportunity for radical change and reform of public services. Redesigning and restructuring our public sector will not be quick or easy, but it is necessary and needs up-front investment that will garner long-term benefits.

Northern Ireland Finance Minister Says Innovation Is Needed Both In Finance And Politics To Help The Public Sector
Northern Ireland Finance Minister Says Innovation Is Needed Both In Finance And Politics To Help The Public Sector

“Partnership is key to reform and we must combine all resources available, across all relevant sectors if we are to succeed in meeting the needs and expectations of our diverse range of service users.”

The Minister added: “The work of finance professionals in the public sector ensure financial probity, regularity and value for money in procurement and commercial activities. They play a vital role in delivering savings to help reduce the deficit, whilst continuing to deliver operational and policy priorities to the public.”

Discussion panels were held during the conference, with the Auditor General of Victoria, Australia; Controller of Audit at the UK’s soon-to-be defunct Audit Commission; the finance manager at the Ministry of Finance in Sri Lanka; and lecturers and professors at prominent UK universities. They discussed financial reporting and its impact on decision-making, as well as the issue of holding governments to account for their actions. There was also a panel discussion on creating trust in public services.

Mario Abela, leader in research and development at the International Federation of Accountants (IFAC), gave a presentation on the development of financial reporting.

He said: “Governments are claiming more transparency but we’re seeing a credit card statement, not the full impact of their decisions. It’s difficult to hold governments to account for their actions based on that limited information.”

He also pointed out that citizens are faced with financial statements which are impenetrable – where governments have attempted to be transparent, not enough has been done to help explain what story they tell.

Mario added: “But it is difficult for an accountant to explain to a minister the difference between technical concepts like ‘control’ in determining the boundary of the government’s activities, and the benefits of wider financial reporting.”

Dr Mah Hui Lim, former professor and international banker and author of Nowhere to Hide, spoke about financial industry practices and malpractices, and structural imbalances in the international economy that still persist in this period of recession.

Dr Lim said: “To reduce inequality wages need to rise in tandem with productivity growth.” In response to questions about how to hold culprits of both illegal and dubious financial activities to account, he thought that fines had limited inpact on behaviour because of the potential financial rewards. A better deterrent might be wider use of jail sentences.

He closed his presentation with a quote from philosopher George Santayama, who said: “Those who cannot remember the past are condemned to repeat it.”

Anthony Harbinson, ACCA’s president and director of Safer Communities’ Safety at the Department of Justice in Northern Ireland, gave the closing speech.

He said: “At ACCA, we have more members in the public sector than any other accountancy body.

“It is the job of the finance professional to ensure that people understand what is in the financial statements and that the information is as clear and transparent as possible, so that this information can be relayed to other parties, such as the general public, or the media.

“The media plays an important role in relaying information to the general public. So if they don’t understand it, misinformation occurs. We need to stop that from happening.

“The public sector faces significant challenges on a daily basis, but it survives thanks to the hard work and dedication of the people who work within the sector and who deal with them. It is for this reason more than other that we need more capable, complete finance professionals within the Public Sector.”

Chris Ridley, ACCA’s public sector policy manager, who gave a presentation on new reporting developments at the conference, said: “This year’s conference has held an interesting debate about how closely aligned finance and politics really is.” He further stressed the importance of linking finance to the outcomes produced by an organisation and for the information to be presented in a format that could be easily understood by non-accountants.

“Simon Hamilton put it very succinctly by saying that the worlds of finance and politics can appear to be far apart, but are inextricably linked.”

“This is very apparent and now is the time for finance professionals and politicians to work more closely together to get a better understanding of not just their country’s economy, but the world’s economy too.”

View the video of the sixth International Public Sector Conference at http://www.accaglobal.com/gb/en/technical-activities/public-sector/public-sector-conference/international-public-sector-conference-2014.html

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