What can uk government learn from its international peers gfp conference
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“What can UK Government learn from its international peers?” GFP Conference. 19 November 2009 Andy Potter Gillian Russell. Agenda. Background to Deloitte Global Study – Mastering Finance in Government Overall Global Findings A UK Perspective Breakout session 1 and feedback

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What can uk government learn from its international peers gfp conference

“What can UK Government learn from its international peers?”GFP Conference

19 November 2009

Andy Potter

Gillian Russell


Agenda

Agenda

  • Background to Deloitte Global Study – Mastering Finance in Government

  • Overall Global Findings

  • A UK Perspective

  • Breakout session 1 and feedback

  • Investing in Outcomes – Case Study

  • Breakout Session 2 and feedback

  • Q&A


Why we did the study

Why we did the study…

Rising healthcare costs

Balancing the needs of the ageing and young

Financing long-term capital needs

Rising Citizen Expectations


Background of global finance transformation survey

Background of global finance transformation survey

  • Deloitte Research conducted a global survey to understand the maturity of the finance function in governments across the world.

  • The survey results were supplemented with secondary research and case studies.

  • Few responses received from the UK.

More than 200 responses from across the world

31

68

54

13

2

3

2

2

8

4

14

Source: Deloitte Research Global Study on Finance Transformation


Key findings of the survey

Key findings of the survey

  • Significant gaps exist between current finance capabilities and government needs.

    • Lack of up-to-date information for decision making

    • Inadequate information on costs

    • Relationship between investments and outcomes is unclear

  • Most finance organisations do better in the tactical roles (Steward and Operator) than at the strategic roles (Strategist and Catalyst) - the roles that are the most critical to addressing many of government’s biggest fiscal and operational challenges.

  • The greatest need in government finance today is for a finance function that can offer timely information to influence key operational and strategic decisions – to drive efficiency and cost savings.

Leading Edge

Strategist

Catalyst

Threshold

Performance

Performance

Execution

Finance

Function

CFO

CFO

Focus

Focus

Triangle

Triangle

Control

Efficiency

Operator

Steward


The uk perspective results from 7 uk public bodies

The UK Perspective (results from 7 UK Public Bodies)

UK scored well

UK scored

less well

Somewhat

Disagree

Somewhat Agree

Strongly Agree

Disagree

Neutral

Finance Master

UnitedKingdom

Global Average


Breakout session 1

Breakout Session 1

Discuss in table groups:

  • Finance is still not viewed as a catalyst for change in the organisation –is this true, and if so, what needs to change to make this happen?

  • How should we leverage existing management information to identify areas for cost savings and what can we do to improve our management information


What can uk government learn from its international peers gfp conference

Decision-making not consistently evidence-based

Investments based on strategic decision-making and evaluation

Strategic options evaluated once , annually

Strategic evaluations and investment proposal development continuous throughout the year

In-year pressures handled on a case-by-base basis

In-year pressures handled within the ongoing strategic decision-making process and framework

Costs managed so that funding envelope is not exceeded

Value managed recognizing that cost is a constraint

Case Study: The Ontario Ministry of Health and Long-Term Care is embarking upon a major transformation

The Ministry of Health and Long-Term Care (MOHLTC) is Canada’s largest health care organization, with an annual budget in excess of $40B to serve 12 million residents. In order to mitigate the projected rate of increase in health expenditures in Ontario, improvements are required in the way that resource allocation decisions are made.

  • MOHLTC has concluded that the relationship been investments and outcomes must be better understood when strategic and operational resource allocations are being made.

Tomorrow…

Today…

Portfolio Management Vision

Portfolio Management will support the Ministry's new role as steward of the health system by aligning strategy and target setting, investment decision-making and performance measurement around a common view of value.

Source: Ministry of Health and Long-Term Care, 2006


From a financial perspective portfolio management is at the heart of the transformation

From a financial perspective, Portfolio Management is at the heart of the transformation

Portfolio Management is a process to identify, evaluate and prioritise investments in order to maximise value and ensure the sustainability of the health system

Strategic Plan

+ other

influencers

Strategy Development

  • Portfolio management provides the means to ensure the linkage between the strategies of the individual portfolios and the performance scorecards (outcomes) of the portfolios

  • Investment portfolios are typically structured to create accountability for achievement of defined outcomes and control over the resources required to do so

OperatingFunding

Strategy Maps

StrategicInvestment

Budgeting

PortfolioManagement

PerformanceMeasurement and Target Setting

+ other

Health System Funding

Scorecards

influencers

AccountabilityAgreements

Accountability and Performance Management

Source: Ministry of Health and Long-Term Care, 2006

Results


Customised evaluation approaches will be required for different investment types

Customised evaluation approaches will be required for different investment types

STRATEGIC INVESTMENTS

OPERATIONAL INVESTMENTS

System CapacityBuilding

Innovation

Health System Value

Existing OperationsMaintenance

ProductivityImprovement


What can uk government learn from its international peers gfp conference

VALUE and RISK criteria are being developed to help prioritise and align investments with strategic objectives

Value category

Risk criteria

Internal and external

stakeholder alignment

Impact on outcomes

Feasibility

Sustainability of

outcomes

Skills and capabilities

Timeline to outcome

Implementation

timeline

Critical foundational

Legal/contractual

element

obligation


Breakout session 2

Breakout Session 2

Discuss in table groups:

  • How do you prioritise investment decisions today and how transparent and consistent is the process?

    2. What challenges do you see in adopting portfolio management techniques to assist with resource allocation in your organisation?


What can uk government learn from its international peers gfp conference

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