Value in Public Finance PLG Launch
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For the first session, we introduced the goals and themes surrounding value creation in public expenditure and invited participants to actively help us shape the structure and forward agenda.
The Value in public finance peer learning group provides a platform for those in government, academia, private and other sectors to discuss and explore ways to improve value creation of public expenditure. This peer learning group aims to create a community of individuals and organisations interested in improving public finance and how economies perform. We are an inclusive group of thinkers and practitioners and would welcome international engagement on the above themes as well as any others.
The group meets every 2 months and is co-organised by the GO Lab and Chartered Institute of Public Finance and Accountancy (CIPFA). Jeffrey Matsu and Dr Mehdi Shiva co-lead the sessions.
Session overview
Co-organised by the Government Outcomes Lab and Chartered Institute of Public Finance and Accountancy (CIPFA), this peer learning group aims to convene discussions on how to incorporate outcome-based thinking in policy decisions amidst budgetary pressures and growing public demand to demonstrate the ‘value’ of public expenditure.
For the first session, we kicked off with an introduction of the main goals and themes surrounding value creation in public expenditure. We invited participants to have their say and help us shape the structure and forward agenda of the peer learning group, depending on their areas of interest.
Peer learning group themes
There are growing public demand to demonstrate the ‘value’ of public expenditure. The tendency is to rely on cost- or price-based approaches in measuring the effect of public programmes. More recently, there has been growing awareness calling for broader measures of value to society – what is known as social- or public-value – utilising new metrics alongside traditional ones in making decisions. This affects economic and financial analyses such as value for money and favours forward-looking approaches such as value- or outcome-based approaches.
The UK’s recently published ‘Sourcing Playbook’ means that procurement decisions are, in theory, subject to scrutiny, ensuring that officials are accountable for the way they spend public money. Covid-19 has demonstrated systemic shortcomings in public service provision across the globe. Meanwhile, cross-sector partnerships between public, private, and the third sector could help societies solve critical problems, while spurring growth, employment and ultimately resulting in positive spill-overs across many sectors. Crucially, sourcing decisions should be made on a case-to-case basis, using past experiences to help inform deliverability, affordability and value for money.
Good governance and regulation, facilitated by standard measurement methods for value and effective public-private partnerships, could benefit from private resources in creating value for the public. This would allow governments to co-create markets by involving private investors (especially those interested in social impact) in activities which yield the highest positive return to society.
A traditional view in economics has been that greater social equity and national efficiency (i.e., growth and productivity) cannot be achieved simultaneously due to a policy ‘trade-off’ between the two. Such thinking has contributed to a surge in spatial and social inequalities across the world including the divide between ‘superstar cities’ and ‘left-behind places’. Such disparities were most recently observed in the human cost of the pandemic as well as the staging of vaccination roll-outs.