Stephen Fitzgerald: The finance professional of the future
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Downward. That’s the direction in which the funding for local government continues even though the recent budget provided more money for adult social care.
It’s this trend which prompted my article Local authority survival strategies because councils have had to look at creative approaches to generate additional income in times of extreme budgetary constraint.
In the chart below we can see the potential movement in local government spending over a ten-year period, and we can see the magnitude of the resource being taken out. In the face of this reduction for many local authorities this can mean nothing other than a severe cut in revenue budgets, and so it’s worth asking what the implications are for financial careers in the future.
Source: DCLG
To start on a positive note, the more that I engage with those currently devdeloping public finance careers the more I am impressed by the mass of talent that is emerging in the sector. While the medium term future is tough, I am sure that we are develping finance managers that have plenty to offer going forward.
Additionally, over the past ten years local government finance professionals have made a fundamental contribution to ensuring that local authorities have been able to continue to operate within the constraints of their revenue budgets in the time of austerity.
However, now the financial agenda is becoming extremely difficult because of long-term expenditure reduction, simply helping to facilitating effeciency, seeking value for money and providing techical support will be insufficient in helping local authorities confronting policy and financial agenda.
The corporate mindsets of organisations needs to change as do the behavour of finance professionals supporting those organisations. In many local authorities, if budgets are to be balanced, the service offer has to be materially reduced across a range of areas. The finance professional cannot be passive in that process but must actively engage on a business partnering basis to help facilitate right sizing.
This brings serious challenges. The sector is running out of options and short-term solutions will not help organisations achieve long-term sustainability.
This means that in the future finance professionals will need to demonstrate greater resiliance and communication skills when trying to help organisations deal with austerity. With this in mind below I list below ten potential behavours the finance manager of the future might demonstrate to help organisations achieve successful outcomes:
- Fully understand the business and financial environment: Research the services you are dealing with so that you approach the savings process with logical arguments.
- Have a vision of how the financial agenda can be delivered: This will give you clarity about the journey that you need to take.
- Have a rational, data driven approach to addressing the financial challenge: Base your approach on facts and not assumptions.
- Empathise with business partners understand the challenges, but be robust and determined: You need to understand service issues but enable yourself to remain objective and focused on the corporate agenda.
- Develop a plan for addressing the budget challenge with milestones and stage gates: Endless talking without plans and processes are unlikely to achieve an effective outcome.
- Take ownership of the issues and the financial realities: It is important that the finance professional remains committed to the finance agenda; if we are not convinced ourselves, how will we convince others?
- Be focused and determined, but take stakeholders with you: Nevertheless, the finance professional alone cannot deliver on a challenging savings agenda. You need to convince rather than tell.
- Have a strong technical offering but don’t let that be the only contribution you make: The core skills of the finance professional are essential but alone this will be enough to make a definitive contribution to a savings programme.
- Be proactive, but pace yourself through the change process: The delivery of a wide scale savings programme can be gruelling and mentally exhausting. Make sure that you survive the course.
- Take a leadership role when circumstnces demand it: The finance professional can no longer be a passive follower. Organisations require more in the current environment. Get out there and do it.
These behavours do bring with them challenges but I know that in our local authorities there are thousands of finance professionals that are already making massive contributions and demonstrating these skills. By addressing some of the difficult budgetary issues now with determination and sensitivity we can ultimately help guide local authorities to a positive and sustainable future.
Stephen Fitzgerald
Stephen Fitzgerald, interim finance director and chair of the ACCA Public Sector Panel.
@SHJFitzgerald
