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How are finance teams driving local government innovation?

Today, local government is facing major challenges that impact the quality of services they deliver to people. In addition, a turbulent economic climate forces municipalities to ‘do more with less’. These challenges force governments to revolutionise how they deliver services to their citizens.

For local government finance professionals, this revolution presents opportunities and challenges. On the one hand, they get to enhance their role as business partners by advising on major transformation initiatives. On the other, they are tasked with helping their organisations to deliver more services to more people, with less money, against a backdrop of widespread organisational and technological change. 

So how are they responding?

The short answer is that they are transforming themselves and their organisations by finding and supporting new models of service delivery, financing and organisational structure. This is according to a new CGMA report Transformation: How finance teams are driving local government transformation, published by the Chartered Institute of Management Accountants (CIMA) and the Chartered Institute of Public Finance and Accountancy (CIPFA). 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.

Two UK based examples help bring the opportunities and issues to life - Sevenoaks Council , which brought in a new property strategy allowing it to invest in its district and bring about regeneration while creating a revenue stream to achieve financial self-sufficiency in a few short years. The other, Aberdeen Council, where the authority issued a bond on the London Stock Exchange to fund an infrastructure plan incorporating the new Aberdeen Exhibition and Conference Centre, the Aberdeen Western Peripheral Route, the Lochside Academy (school), new housing, redevelopment of the art gallery and city centre regeneration. 

But what is local government transformation?

Local government transformation covers a wide variety of topics, from change management and new models of service delivery to innovative approaches to financing and partnering – such as the way United Healthcare (UHC), one of the largest managed-care organisations in the US , has joined forces with community development corporation (CDC) Chicanos Por La Causa (CPLC) to deliver a series of community initiatives.  To support and enable transformation, though, leaders must ensure that they and their teams collectively have the right skills, capabilities, technology and organisational knowledge to succeed.

Furthermore, the all-embracing nature of transformation means finance professionals need in-depth knowledge of the services their organisation performs and how these effect and improve the lives of their residents. In addition, they need the insight and vision to see what can be achieved through sensible, sustainable and innovative transformation. Therefore, ‘knowing the business’ is a critical success factor in developing and implementing any transformation programme. That means finance professionals must eradicate any siloed thinking and engage with stakeholders across departmental and organisational boundaries.

Challenges to transformation

But there are challenges facing transformation, as highlighted by the report: 

  • Getting people to adapt
  • Securing budget
  • Determining the cost benefit
  • Finding the right skills
  • Deciding where to focus efforts

  • How can finance professionals help?

    Finance professionals can play an important role by communicating insights that support better decision-making and drive actions in all these areas. By developing a broad knowledge of operations, the roles of our colleagues and expectations of citizens, as finance professionals we can ‘translate’ numbers into relevant, understandable and actionable business stories. Impactful and insightful finance professionals whose strategic focus, technical knowledge and practical expertise extends across business operations will be key players in the sustainable and affordable delivery of public services