Ethan Strassfield, Big4.com Staff Reporter
A research conducted by KPMG’s Global Government practice has found that concerns over global financial conditions and other factors has resulted in a need to redefine the role of public sector. The other factors include government’s willingness to change and a willingness amongst citizens to take care of their financial health.
In the report titled The Future of the Public Sector: Tough Choices Ahead, KPMG has proposed a three stage approach to changing public sector. The three stages are short term cost reduction, efficiency improvement, and strategic transformation. The report is based on 17 interviews of public sector leaders from countries like Australia, Canada, Germany, Netherlands, UK, and the USA. The report noted that factors like cutting expenses, delaying major projects, improving financial management, and management of external advisors are not the sole factors that will have a financial impact as desired. It has been noted that the countries which has faced strain on their public finances in the post recession period, requires more fundamental change in the public services sector.
In order to achieve this target, various governments will require public support and will gradually overcome barriers and resistance from staff and trade unions. Transformational change thus should take place after a debate between public sector policy and decision makers and the public regarding the role of the state.
Daniela Nemoianu, Partner, Nemoianu Attorneys at Law - the Romanian law firm associated with KPMG in Romania - and Head of Advisory KPMG in Romania, says, “In the first stage, the Romanian government has to adopt short-term measures to save money very quickly to buy time to focus on the longer-term issues. The long-term focus should be on the role of the public sector: what it should be doing and what it should stop doing because it is no longer affordable. At this stage, government is facing tough political choices which are likely to be controversial. They should explore the issues around spending, funding and the role of the private and not-for-profit sectors in the transformation of public services.”
The aim should be take short term measures. One can start by cutting expenses, decreasing employment costs, and delaying major projects, which will help in savings and show immediate results. One can also improve efficiency through effective financial management and by sharing resources through forming closer relationships between public organizations. In tune with this change all governments round the world are increasingly opting for public private partnerships (PPPs) and private finance initiatives (PFIs).