2025: A Year of Reform

“The stage is set for a transformative year in public financial management. The global political changes of 2024 including a new UK Government with fresh leadership and shifting priorities, brings both challenges and opportunities. For public finance professionals, 2025 is a crucial year to embrace potentially seismic reforms, strengthen public financial management and contribute to rebuilding trust in public institutions. Urgency and decisive action are vital to ensure these reforms deliver meaningful and lasting change.”

Seizing the moment for public finance reform

Many public services are under unsustainable pressure. Demographic changes, economic shocks and the continued impacts of the pandemic and cost of living crises have led to increases in service demands and related costs that far outweigh public funding. But with continued sluggishness in economic growth and no let-up likely in global instability, it’s a situation that no government can or should simply spend its way out of. Bold and systemic reform is required that pursues transformative strategies that deliver sustainable changes and better outcomes for communities.

CIPFA is committed to influencing these reforms and will advocate for policies that promote long-term financial management and resilience across the public sector.

Funding Reform and devolution

Too many funding mechanisms are overly complex or short term. Be it annual settlements in local government, repeated emergency winter top ups in health or overuse of competitive bidding rounds, simplified and longer-term settlements are essential to enable better planning and to shape resilience efforts. The promise of greater devolution underpins other high-profile reforms. Empowering local leaders to shape services that address their communities’ specific needs will foster a more responsive and effective public service system. True devolution requires more than the delegation of responsibilities; it demands robust frameworks for funding, governance, and accountability.

Whilst there will inevitably be differing views about what local arrangements are seen as optimal, the need for reform and change is too urgent to indulge extended arguments. And careful judgement will be needed to balance the mutually desirable but potentially competing approaches of rapid “lift and shift re-organisation” versus seizing the opportunity to re-imagine local service provision shaped around a prevention first approach that puts citizens and communities at the heart of reforms.

Rebuilding trust and strengthening governance

Last year continued the troubling erosion of trust in public institutions. Restoring this trust is essential for successful reform. CIPFA welcomes the ongoing consultation on strengthening standards, with a focus on integrity and culture. Finance professionals play a critical role in this effort, acting as stewards of accountability, probity, good governance and transparency. Our work to support and develop performance audit and anti-corruption initiatives are particularly important in reinforcing trust.

Public audit in England and must build on the painful but necessary recent first step to recovery through audit backstop dates and the widespread use of disclaimed audit opinions, to re-establish timely audited accounts that can instil greater confidence that public funds are being used effectively. CIPFA is committed to supporting reforms and advocating for a strong, independent system that meets the needs of accounts preparers, auditors and users.

Innovation and leadership in a changing world

The challenges of 2025 demand public finance professionals who lead with resilience, adaptability, and innovation. From leveraging new technologies to adopting ESG principles and considering how reporting and assurance practices can incorporate new sustainability standards, finance practitioners must balance immediate fiscal responsibilities with the need to drive transformative change.

Reform and innovation also require a skilled and qualified workforce. The proposed withdrawal of UK Level 7 accountancy apprenticeship funding risks removing what has become a primary route into public finance careers for many young people. This poses a significant threat to all public services and how they can recruit, develop, and retain talent. CIPFA will continue to advocate for reforms that safeguard access to this vital profession whilst also meeting the government’s aim of increasing opportunities for under-represented groups.

The year ahead for CIPFA

This changing world also impacts CIPFA as an institute and how it engages with and supports its members and the wider public finance profession. In my first phase as CEO I have relished the opportunity to engage with public finance professionals across the UK and internationally.

There is much for CIPFA to be proud of about what it does and how it does it. And like all organisations looking to adapt and stay resilient and relevant in a rapidly changing world there are also things we will be looking to evolve and improve in 2025 and beyond.

CIPFA’s core purpose remains unchanged as the home of excellence in public finance. We exist to ensure public money is well spent and well managed for the benefit of us all in the pursuit of sustainable, confident and resilient public services around the world.

We are pursuing this goal through three core areas of work:

• CIPFA Thinks: Our work as a standard setter, thought leader, influencer and champion of effective financial management
• CIPFA Develops: Our work to attract, educate, support and enable lifelong skills development as professional career companion for students, members and other professionals who need to enhance their commercial and financial understanding
• CIPFA Supports: Tools, frameworks and advisory services to support public service organisations to improve their financial management, governance and resilience.

In addition to this way of organising our work, our focus in the coming year will prioritise four strategic themes:

• Influencing Reform: Advocating for sound public financial management and effective reform in governance, health, social care, and devolution.
• Empowering Professionals: Providing tools and resources to enable members to lead change with confidence and impact.
• Strengthening Partnerships: Working with stakeholders and other partners, especially our key strategic partner ICAEW, to amplify our influence and support.
• Driving Innovation: Embracing digital-first approaches to modernise public finance and deliver better outcomes.

This strategic approach, discussed openly in national and regional conferences and events and also at CIPFA Board and Council meetings, provides us with a clear focus and aligned way of thinking.

Now this strategic approach is clear, it is timely to also review our governance, to ensure we are operating in a way that best supports these ambitions, and that provides assurance to ourselves and our members that we are also following the high standards and good practices we promote.

With the endorsement of CIPFA Council and Board, we are undertaking a governance review, led by an independent party and supported by a working group, to evaluate our current structures and practices. The review's outcomes will help us maintain robust governance systems that align with our ambitions and are embraced by members and key stakeholders.

A year to remember

CIPFA will celebrate its 140th anniversary this year. We will continue to take pride in our long history whilst staying focused on the future. The time to act is now, both for public finance professionals and for us as an institute.

We will continue to use CIPFA’s global reach to champion excellence in public finance and support professionals and the public service organisations they work for to achieve decisive progress, collaboration, and meaningful change.