The government’s spending curb will have a huge impact on public sector
The future is uncertain for many finance staff, but it also means a “formidable”
workload for the accountants left at the coalface, according to the chief of the
public finance accountancy institute.
Steve Freer, chief executive of CIPFA, warned that, as the government tried
to preserve front line services, back–office staff and operations would be
sacrificed. The accountants left at the coalface would have a bigger workload to
handle but with fewer resources. “There will be no hiding place,” Freer told
Accountancy Age. “The workload is going to be formidable. There are some worries
about members working under pressure and stress.”
Even government efforts to ring-fence the NHS from the cuts would not fully
protect its FDs from resource issues as they try to achieve the massive task of
balancing the NHS books.
Very low levels of growth are going to come as a “huge shock”, Freer added.
“Even those protected services are going to find it hugely difficult. It’s going
to be tough across the health service, central and local government
However, Freer said the efficiency drive would open up some opportunities for
accountants. He referred to his experience of similar cuts in the 1980s which
saw an increase in demand for advisers as cuts were made. “When faced with these
situations, departments will find they need high quality accounting advice so
there will be more opportunities.”
Freer’s optimism is not shared by recruitment experts, who fear that many
thousands of public sector accounting and finance staff will hit the jobs market
in the wake of the cuts.
Research from recruitment company Ambition suggested 2.3% of the current
public sector workforce is made up of accountants and finance staff – around
140,000 permanent employees. With the government proposing £6.2bn of public
spending cuts, departments are expected to shed 725,000 jobs – equating to
16,500 finance professionals.
Tim Gilbert, UK managing director of Ambition, predicts public sector staff
looking to crack the private sector would have to take dramatic reductions in
pay or responsibility. “Qualified accountants with ten years’
post-qualification experience will find themselves having to consider positions
for newly qualified accountants,” he warned.
In a new survey of 60 government departments, public sector experts from PwC
also flagged up problems that already exist, even before the cuts are made.
Particular bugbears for finance functions were managing change, increasing
efficiencies and balancing the budget and restructuring as cost pressures
The current economic situation meant that respondents expected little change
in the likely major issues facing them in three years time. John Berriman, chair
of PwC’s public sector finance board, said: “Taken together, our research
confirms our view that finance has some major challenges ahead.”
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Head of editorial Kevin Reed discusses this week's important accountancy news, including Brexit and audit market evolution