Annual Conference

We report back on the events at CIPFA in the North East's Annual Conference

Almost 100 delegates from across the North East and beyond gathered at The Sage, Gateshead on Friday 23rd November 2018 for the 8th Annual CIPFA in the North East Conference. Judith Savage, Regional President, started with an outline of the themes for the day. The role of public finance professionals was critical for the modern public sector. She also made a quick plea for more volunteers to help keep running events like this.

Paul Woods, Chief Finance Officer of the North East Combined Authority, chaired the day, and did the introductions. Change, Transformation and Integration was the theme for the day. He had started at NECA four years ago on a six-month contract, and is still there!

He introduced Sarah Howard, National President of CIPFA, talking about a Perspective on Change. She has been volunteering with CIPFA for 25 years. Our people (the CIPFA family) and our purpose (strong financial management) were both key. In public services generally, there had been a breakdown in trust by the public. But too often the response to this had been more top-down control. Technology was also driving change. The three themes for her presidential year were: 1) Rebuilding trust 2) Encouraging collaboration and 3) Inspiring the next generation. She noted that CIPFA were the first UK accountancy body to fully adopt the new IFAC Code of Ethics. CIPFA’s regional network is a key resource in encouraging collaboration between organisations, along with working with other bodies like HFMA. After her speech, there was a Q&A about the themes for her presidential year.

Anna Caine and Tori Hutchinson of the NHS Business Services Authority talked about “What happens when Digital Transformation meets the NHS?” The NHS BSA regards digital transformation as key, both for it to provide services to the NHS and for the NHS to provide services to the public, more effectively and efficiently. They talked about the NHS Jobs service they run for the NHS – 380,000 vacancies from 6,800 organisations are posted here every year. But NHS Jobs needs re-invigorating for the new contract in 2020. They are not going to buy in a new system, but will build and configure their own, using open source code. They may therefore be able to sell-on the result. The Loss Recovery Services at NHS BSA (detecting people who should be paying for prescriptions or dental services, but who are claiming exemptions) have also been subject to Digital Transformation. The NHS BSA were looking to issue more Penalty Charge Notices to people incorrectly claiming exemptions, but also to reduce false positives (PCNs issued that shouldn’t have been). A new format for PCN letters has been adopted to reduce queries to their call centre. They have also added the ability for end users (the public) to check “Am I Exempt?” online to reduce unwarranted exemption claims and reduce the need to issue PCNs in the first place. They were also running a national communications campaign via pharmacies to emphasize that “Not all benefits entitle you to free prescriptions.”

After a refreshment break, Stuart Reid talked about Town Centre Regeneration in South Shields. We needed to re-imagine our town centres – half of our existing retail stores will close by 2030. The UK was already the world leader for shopping online. People were talking about the “death of the high street” in the light of closures like Woolworths, BHS, Blockbuster and Poundworld. The Grimsey Review of Town Centres recommended the establishment of Town Centre Commissions, embedding libraries and other community hubs, more power for councils, and smarter use of technology (public wifi etc.) South Tyneside Council were looking to increase businesses and jobs. There had been lots of redevelopment through their partnership with BT. But South Shields still lacked a retail circuit. So the “South Shields 365 Town Centre Vision” was launched, to produce a better retail/leisure offer in the town centre. The central library in South Shields has been replaced by “The Word” - the National Centre for the Written Word. He noted, in a subtle hint, that this was a “good conference venue.” Sites like this created confidence in the markets nd helps boost further developments. They are also looking to make improvements with a new Transport interchange in collaboration with Nexus. This is due for completion in Summer 2019. The next phase after this will look at Retail and Entertainment – cinema, cafes and restaurants. It was important to have good risk management on projects this size – you needed to engage with partners. You also needed council members to make trade-offs in the capital programme to afford projects like this. You need to have – or buy in – capable legal and project management experience. And there needed to be regular scrutiny and challenge of delivery.

Jonathon Sheppard and Az Amed from Penna led an interactive session of “The Role of a Modern Finance Director – Private and Public Sector Insights.” Jonathan explained that Penna are an HR consultancy working with CIPFA. Their number of interim placements has grown from 40 to 70+. They also offer executive search and sourcing recruitment. The hot topic at the moment was that organisations that have lost their leadership position (especially in retail) have done so because they failed to respond to changes in technology. Succession planning for staff was also an issue in many private and public sector organisations. The Finance Director has to wear more than just a narrow finance “hat” these days, in both the public and private sector. They need to be a key player moving the organisation forwards. The conference delegates then started using the Kahoot! Application on their phones to do an interactive survey on what delegates thought were the key roles of a Finance Director these days. You need to make sure that technology isn’t just a way of “doing stupid things faster” - accountants are still needed to challenge the financial information that technology brings you.

After lunch, Judith Savage reported that CIPFA’s national Sir Hedley Marshall Award for regional volunteers had been awarded this year to Bruce Parvin of CIPFA in the North East. National President Sarah Howard presented the award to Bruce.

Michael Newbury, the National Audit Office’s Director of Financial Audit, kicked off the afternoon session with a presentation on “Financial Sustainability – The Never Ending Story.” Council funding pressures seem to be always with us. What were the challenges for councils since 2010? What were the implications for service delivery and financial sustainability? Does central government have an understanding of council’s funding requirements? There had been substantial real term falls in government funding to councils since 2010, especially outside of Adult Social Care. But demand has been increasing, especially on homelessness. Councils can’t make any further savings, so are having to cut resources, and/or dig into reserves. Planning, Housing, Highways and Cultural Services have all borne the brunt of service cuts in councils. The only area with spending increases is Children’s Social Care. Total spend has not fallen as much as net spend – income and reserves have been used to “soften the blow.” But this means that the cost of services is increasingly falling on service users. And there are growing over-spends in top tier councils. Councils have been able to maintain reserves until recently, but there has been a clear fall in reserves in the most recent year for top-tier councils; 66% of these councils were drawing on reserves in 2017/18. Use of reserves was increasingly unplanned, representing a struggle to implement savings or manage costs. Dwindling reserves were not necessarily a problem if planned. But sector-wide reductions indicated pressure on councils and limited room for future manoeuvre. And demographic pressures were still increasing!

Due to one of our speakers being stuck on a train, Paul Woods then did an impromptu update session on the latest news for Fair Funding for Councils, especially in the context of the North East of England. Almost all of our councils are “topping up” Children’s Social Services spend. He also did a quick tour of the NE Local Enterprise Partnership website, which has lots of information on Brexit generally and what in particular it might mean for the North East region.

The final session of the conference was Tracey Simpson of NHS Tameside CCG and Tom Wilkinson of Tameside Council, talking about “Integration – the Tameside and Glossop Way.” They both now work for Tameside & Glossop Integrated NHS Foundation Trust as part of an integrated finance and strategic commissioning function. As part of Greater Manchester, all Health and Social Care funding is part of the devolution deal for the city-region under the elected mayor. The borough doesn’t have good demographics on health, so needs to use devolution to improve health outcomes for the localities in the area. They wanted to focus on a place-based service – integrating care organisations under the Foundation Trust license as an Integrated Care Foundation Trust. They had aligned leadership across all bodies involved (the council, CCG and hospital). They have had a joint CFO since Autumn 2017. There was lots of working together and co-location of staff across the Health and Social Care agenda across the borough. The focus was on public outcomes, not organisational structures. They were also leading on Digital Health. Tom explained how the money works; they were facing a financial gap from funding cuts and demographic pressures. So they viewed the organisations’ budgets as a Single Integration Commissioning Fund of £1 billion – designed to avoid “cost shunting” between organisations and services. There were three pots; Section 75 services, Aligned Services and “In Collaboration” services (things that can’t legally be a section 75). There had been some cultural issues in joint finance working – are negatives good or bad variances? Should they use traditional or more flexible finance reporting formats? On governance, the joint Strategic Commission Board meets first, then the statutory Council & CCG. The benefits of the new arrangements were streamlined governance and decision-making, strong budget leadership, a single accountable body for section 75, and all health and council decisions intrinsically linked to joint corporate strategic priorities.

Paul Woods summarised the day, and thanked all of the speakers. He also thanked all the delegates for coming and for their questions. Delegates were asked to please fill in and return feedback forms, with £20 of intu vouchers for the most helpful. The day at the Sage concluded with a Drinks Reception provided by our sponsors. EY.