unless action is taken to strengthen management of the public finances things can only get worse

06-11-2014

CIPFA, the Chartered Institute of Public Finance and Accountancy, has today challenged all political parties to work to radically reshape public financial management in the UK to avoid significant economic pitfalls in the future and to help restore public trust in government.

The call comes in CIPFA’s pre-election manifesto which outlines a series of concrete actions that the next Government should take if it is to ensure the long-term stability of the public finances.

Given the fragility of the global economy, known demographic pressures and the stubbornly low productivity of the economy, CIPFA believes there is an urgent need for Government to think beyond one electoral cycle. 

The document calls on all political parties to take a more strategic approach to how the UK invests for the future and to manage the public finances for the medium to long term.

It establishes the pressing need for reform to local government arguing for fundamental change to local taxation and for decisions on public services to be taken at a local level to improve delivery for communities.

It argues that if we are to restore public trust in Government we need to embed better governance and transparency.

Speaking on the launch of the report, CIPFA CEO Rob Whiteman said:

“The fiscal challenges that the UK faces are often simplified to the country not having enough money, this is not the case.

“The reality is that the ways we plan and implement policies and decide upon how we manage our resources are no longer fit for purpose.

“The system has become broken over many years as it has struggled to manage the increasingly short sighted political cycle which places more weight on success of an announcement in the media, than on the long-term interests of country and its public finances.

“If we are to see a long-term sustainable financial future for the UK we need to radically reshape the way we run our public services and reshape our management of the public finances.”

ENDS

Notes to editors

While setting out some of the long term fiscal challenges the UK is currently ducking, the manifesto also sets out key policies that CIPFA believes need to be introduced if the UK public finances are to be sustainable in the long-term.

These include:

  • a legal requirement for regular property tax revaluations
  • a shift to more income related benefits
  • co-payment for some services
  • an increased role of private sector service provision
  • the replacement of the Barnett formula to meet clearly stated aims for distributing funding between England Scotland, Wales and Northern Ireland
  • the establishment of an Independent Grants Commission to advise on methodologies and decisions on devolved funding distribution across the UK 
  • the expenditure on outsourced contracts for public services to be made transparent through open book accounting

CIPFA’s manifesto discusses the proposed elimination of the budget deficit by 2018/19 and the profound choices that will have to be made by policymakers, politicians and voters to achieve this. It calls for the need for further reform to ensure public finances are sustainable over the coming decades and for the government to avoid making further fiscal commitments which it ultimately cannot afford.

Download a copy of the manifesto online.