Magazine article Public Finance

Councils Must Learn from Private Sector

Magazine article Public Finance

Councils Must Learn from Private Sector

Article excerpt

Local authorities must substantially improve their financial management arrangements in the 'brave new world' of reformed public services, James Strachan told the CIPFA annual conference in Manchester.

The chair of the Audit Commission, addressing delegates on June 15, warned that in future public bodies would need to produce private sector-style annual reports and accounts to meet the demands of greater transparency and accurate and timely information.

As more 'market lubricants' are introduced to public services, local authorities will need access to the same kind of up-to-date financial information that well-run private firms produced to ensure effective decision-making, he said.

Private firms could produce accounts within weeks of their year-end, even if they operated internationally, 'but most of local government still takes months to produce a set of accounts', he complained.

Strachan also highlighted local authorities' failings in collating the information they are already required to produce, saying that 26% of accounts had had to be resubmitted because of errors.

But, in a comment from the floor, Nottinghamshire County Council chief executive Roger Latham challenged Strachan's comments, arguing that the two sectors were different and it was misguided to import private sector practice. …

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