“Pub­lic fi­nances must pro­vide value for money”

Financial Mirror (Cyprus) - - FRONT PAGE -

The pub­lic sec­tor is a vi­tal part of the econ­omy, where in the UK it ac­counts for around 40% of GDP, while in Cyprus it should pro­vide value for money, a lead­ing ex­pert on pub­lic fi­nances said ahead of a speech this week.

Ross Campbell, Di­rec­tor, Pub­lic Sec­tor at the In­sti­tute of Char­tered Ac­coun­tants of Eng­land and Wales (ICAEW) where he pro­vides a strate­gic fo­cus to the In­sti­tute’s work to im­prove stan­dards in the man­age­ment of the Pub­lic Fi­nances, both in the UK and in­ter­na­tion­ally, will ad­dress an event on Thurs­day evening hosted by the British High Com­mis­sion.

His pre­sen­ta­tion, “Sound Pub­lic Fi­nances, Sound Econ­omy” at the Hil­ton Park in Nicosia at 6pm, will be fol­lowed by a cock­tail re­cep­tion.

Through­out his ca­reer, Campbell’s main in­ter­est has been re­form and im­prove­ment of fi­nan­cial and com­mer­cial man­age­ment in the pub­lic sec­tor to which he brings strate­gic-level ex­per­tise from both pub­lic and pri­vate sec­tors. Be­fore tak­ing up his cur­rent role at the ICAEW, Ross was the ac­count­ing pol­icy lead and fi­nan­cial re­port­ing stan­dard set­ter for the UK Cen­tral Gov­ern­ment at HM Trea­sury. Other re­cent se­nior roles in gov­ern­ment in­clude be­ing the Group Chief Ac­coun­tant at the Min­istry of De­fence and the Di­rec­tor at the Na­tional Au­dit Of­fice re­spon­si­ble for the value for money re­view of De­fence.

Asked about the role of pub­lic fi­nances in the gen­eral ef­fort for pub­lic sec­tor re­form and in achiev­ing growth, Campbell said that “the pub­lic sec­tor sets the reg­u­la­tory and tax frame­works in which much of the econ­omy op­er­ates. It is also a vi­tal part of the econ­omy – for ex­am­ple in the UK the pub­lic sec­tor ac­counts for around 40% of GDP.

“Ev­ery year, the Cypriot gov­ern­ment man­ages around $12 bln of pub­lic money, so en­sur­ing it pro­vides value for money is cru­cial.”

How, then, can a Fi­nance Min­istry en­sure that it im­ple­ments sound eco­nomic pol­icy?

“The Fi­nance Min­istry should op­ti­mise the man­age­ment of a coun­try’s re­sources and be at the core of strate­gic de­ci­sion­mak­ing. It should en­able govern­ments to base poli­cies on sound fi­nan­cial in­for­ma­tion. What­ever govern­ments want to do, fis­cally, will rest on ro­bust fig­ures,” Campbell said.

“A Fi­nance Min­istry should also be able to mon­i­tor and man­age gov­ern­ment spend­ing and costs. This means it can strengthen stan­dards, im­prove bal­ance sheet man­age­ment, and drive value for money across gov­ern­ment. It should look longterm, be­yond the par­lia­men­tary cy­cle.”

And what about par­lia­ment?

“The par­lia­ment looks to the Trea­sury to make sure de­part­ments use their pow­ers only as in­tended, that rev­enue is raised and re­sources are spent only within agreed spend­ing lim­its,” the ICAEW ex­pert said.

Asked about what would con­sti­tute a good fi­nan­cial man­age­ment, Campbell said, “an ef­fec­tive and ac­count­able fi­nance min­istry should have a clear man­date, set­ting out roles, re­spon­si­bil­i­ties and ca­pa­bil­i­ties to en­sure fi­nan­cial plans are well­founded and sus­tain­able. This should in­clude a clear dis­tinc­tion be­tween macroe­co­nomic pol­icy and man­age­ment of tax and spend­ing plans. It should also have a strong fo­cus on the day to day op­er­a­tion of the pub­lic fi­nances, and any fi­nan­cial risks to the de­liv­ery of gov­ern­ment pol­icy. Fi­nally, it should em­pha­sise man­ag­ing long term sus­tain­abil­ity of the pub­lic purse, rather than short term ex­pen­di­ture.”

“Such a min­istry would need peo­ple with the right mix of fi­nan­cial and com­mer­cial skills, and ap­pro­pri­ate tools and sys­tems. It will be re­spon­si­ble for busi­ness plan­ning, risk man­age­ment and im­proved fi­nan­cial in­for­ma­tion, and needs the frame­work and struc­ture to en­able this. “

In con­clu­sion, he spoke about the role of pro­fes­sional bod­ies such as ICAEW in en­sur­ing sound pub­lic fi­nances.

“Fi­nance pro­fes­sion­als in busi­ness play a cen­tral role in im­prov­ing fi­nan­cial plan­ning and man­age­ment. Much of that ex­per­tise is also rel­e­vant to the way govern­ments man­age pub­lic money.

“ICAEW has both a proud tra­di­tion and a duty as a char­tered body to act in the pub­lic in­ter­est. This means also help­ing shape how govern­ments can up­hold their duty to the pub­lic to spend pub­lic money ef­fi­ciently and ef­fec­tively. Fi­nally, of course, ICAEW is train­ing the next gen­er­a­tion of fi­nance pro­fes­sion­als, who may well go on to work in this area,” Campbell said.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.