Magazine article Public Finance

Capital Ideas for Planning Change

Magazine article Public Finance

Capital Ideas for Planning Change

Article excerpt

Integrated reporting in the public sector could improve the planning of public services across changes in governments and assist in the allocation of scarce resources, experts at a groundbreaking conference have said.

Speakers at the first meeting of the International Integrated Reporting Council's Public Sector Pioneer Network, held in London on 27 May, discussed the development of for the public sector.

Opening the event, IIRC chair Professor Mervyn King said that since the launch of the pioneer network with the World Bank and CIPFA last November, 34 organisations from across the globe had already participated in webinars about the principles of integrated reporting.

is based on integrating an organisation's thinking about its work and how it creates value, he said. An integrated report therefore looks at an organisation's use and contribution to six "capitals" - financial, manufactured, intellectual, human, social and relationship, and natural - to promote an understanding of their interdependencies and value creation over time.

These principles can apply to public sector organisations as many are already run as integrated institutions, King said.

"Just take a hospital - the running of a hospital on a daily basis is in an integrated, interconnected, interrelated manner," he told delegates.

"We talk of the six capitals used by an entity, and we also talk about the ongoing relationships with an entity's stakeholders - identifying them and learning of their legitimate and reasonable needs, interests and expectations. None of this happens in silos and, in running a hospital on a daily basis, management deals with it on an integrated basis."

In this context, a traditional form of financial reporting is "critical but on its own clearly not sufficient" amid increasing awareness of the impact non-financial aspects of an organisation can have, King said. …

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