GOVERNMENTS MUST drastically rethink public finance planning, building in longer-term stability, CIPFA has urged.
In the public sector accounting institute’s pre-election manifesto, Things can only get worse?, it calls for medium to long-term budgeting, allied with “strategic” investment to stimulate growth – which will mean difficult decisions politically.
“If debt levels are to remain sustainable: either taxes will have to go up, substantial cuts will need to be imposed on other budgets such as education, or care and pension levels will need to be cut.
There are no other options,” stated CIPFA in the report.
A “redefinition” of the welfare state must take place, including robustly-measured means-testing. Fiscal power should be devolved away from central government – with a balance between having too small units making service provision decisions.
Financial transparency and accountability are key to restoring public trust, CIPFA added. As such, the setting up and operation of major contracts should be less opaque, and a review of the role of the accounting officers to encourage transparency of their advice to ministers.
This manifesto is CIPFA’s challenge to the political system as the standard-bearer for strong governance and public financial management.
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Head of editorial Kevin Reed discusses this week's important accountancy news, including Brexit and audit market evolution