THE USE of digital technologies such as blockchain and analytics are being prioritised by public sector finance chiefs, to deliver more with less in austerity-hit councils and local authorities, according to new research.
Public sector CFOs said they would step up automation and use analytics more over the next five years to adapt to their changing role in local and central government as they take on greater responsibility for improving performance, an EY report has shown.
In a survey of 19 public sector CFOs in the UK, the report found that 11 said digital technology was a strategic priority in improving performance. Just a quarter said that cutting costs through automation and outsourcing was critical.
The elevated role of the CFO in the public sector is interesting, because it is less than ten years since government departments were first required to hire a professionally-qualified finance director. Before this requirement government CFOs did not need to have any accountancy qualification.
“This requirement has helped ensure good management and accountability in government finances at the top table, effectively helping to put finance at the heart of decision-making,” said Darra Singh, head of UK government and public sector at EY.
Some 13 of the 19 CFOs surveyed said they spend more time on providing analysis and insight to support senior leaders and decision makers than five years ago.
“The pressures to deliver more with less in the public sector has thrust the role into the spotlight and they are responding to this challenge in different ways. This includes the use of technology such as blockchain and sophisticated data analytics. We are seeing quite different profiles and responsibilities emerge when compared to the traditional idea of a public sector CFO,” said Singh.
Some 12 public sector finance chiefs said they spend more time supporting their organisation’s development and its strategic goals, while half said they were increasingly taking the lead in developing and defining overall strategy.
With the role of the public sector CFO set to change, three-quarters said that organisations face a struggle to recruit finance leaders equipped for the digital challenge.
Darra added: “While there is an abundance of specialised finance professionals in the private sector, those with treasury management, corporate finance and procurement expertise can be harder to find in the public sector. Competing for talent, particularly in a budget constrained environment can also pose challenges.”
The 19 finance leaders surveyed in the report came from across the UK public sector including major central government departments and housing associations.