All public bodies face a difficult and testing future. Commentators widely recognise the recession will increase demands for public services, while after the election financial resources could fall sharply. For some the strains this imposes could be too intense.
Our work in the Commission has found that financial failure is inseparable from wider organisational failure. Problems with money can be a symbol of wider difficulties. It is therefore imperative to prevent future failings, for bodies to learn the lessons from those organisations that have suffered from financial failure.
The paper and presentation provide a way to engage senior managers and decision makers in local government on this vital topic. The paper and presentation will help stimulate and facilitate discussions by a local government body on:
- the potential business risks it faces
- ways it can recognise the warning signs of financial and wider organisational failure
- how it can recover and ensure it maintains its position of financial health
- how it can improve its financial standing
Presentation
We have prepared a presentation to introduce the lessons from financial failure and engage with senior management and key decision makers in local authorities. The presentation outlines key economic and service trends and pressures affecting local government. It draws on our knowledge of:
- the impact of the recession from our published and ongoing research into the Crunch series of reports
- local government's readiness in terms of arrangements and resources, to deal with the coming demands
- what we have learned and are learning from our recent and ongoing studies about how authorities can respond to the colder climate
The presentation highlights points from our recent studies: Risk and return, When it comes to the crunch, Back to front, Seeing the light and Working better together. It also brings out some early findings from our upcoming study on strategic financial management.
Handout
The paper draws on a wide range of sources including national reports, public interest reports, and case studies from local government and NHS to bring out the lessons from financial failure for local government. It sets out the lessons under three headings:
- possible causes of financial failure bodies should watch for and avoid
- key changes bodies can take to help with recovery
- steps management can take to improve financial standing.
Under these headings we group the lessons within the common themes of:
- leadership and management - for example leadership in the key posts of chief executive and finance director
- governance arrangements - for example, elected member participation in key committees
- financial management - for example the organisation's culture of service management and financial management