We held our Building Public Trust Awards workshop on reporting in the public sector in association with the National Audit Office (NAO). Led by experts from PwC, the NAO and HM Treasury, the workshop showcased examples of best practice reporting from across the public sector, drawing on PwC’s research and experience of private sector reporting – which shapes the direction of travel for the public sector – and the NAO’s good practice principles for annual reports.
Setting the context
The proceedings were kicked off by Phil Stokes, leader of PwC’s audit practice for Government, Public Sector, Health, Education and the wider Third Sector. “The Building Public Trust Awards were set up to inspire organisations to build trust with their customers and the public, and to solve important problems together,” he explained. “What the awards strive to do is recognise organisations that are producing sustainable outcomes through clear and transparent reporting.”
A perspective from the NAO…
Steven Corbishley, a director at the NAO who leads its audit quality unit began by showing the audience a brief video of the keynote address given by Gareth Davies, NAO Comptroller and Auditor General, at the BPTA dinner in October 2022. Steve then drew on this speech to pick out some key points of good practice in the best public sector reporting. The first was innovation: “Where we see really strong annual reporting is where bodies have developed innovative ways in their annual reports to set out their corporate story,” he commented, adding that we continue to see innovation despite recent challenges such as the pandemic. A second attribute was a “clear thread” – frequently referred to during the workshop as a “golden thread” – running through the reporting on challenges, risks and how the organisation is dealing with them, and linking the front and back halves.
…and views from the audience
Now it was time to get some views from the attendees via two polls. The first poll asked what were the main challenges they faced in their 2021/22 reporting: the results showed that while factors like remote working and communication had dominated at last year’s workshop, these had now been superseded by issues such as sustainability reporting, time constraints and too much content. The second poll asked attendees how they’re changing their approach for the 2022/23 reporting round. Frequent replies included improving project management, starting planning earlier and reducing the amount of content.
Implications of the rise of ESG
The scene was now set for some thoughts from Alan McGill, Global Lead for PwC’s Sustainability Reporting, Measurement and Assurance practice, on the rapidly-rising importance of ESG reporting. He commented: “Whether you look at customers, or regulators, or providers of finance, or civil society as a whole – all of these stakeholder groups and many others are now really interested in the ESG agenda.” Alan went on to explore the implications of this shift for organisations and their reporting, including the need for greater connectivity between Finance and other departments. He added that he’s seeing different organisations take widely differing approaches to ESG governance, ranging from setting up whole new structures to integrating it into existing processes. The key in either case? Embedding ESG into how the organisation is actually run.
Drilling down into what good looks like
Next the spotlight moved to what the leaders in public sector reporting are getting right. Steve Corbishley of the NAO explored the NAO’s four key principles of a good annual report: accountability, transparency, accessibility, and understandability. NAO audit manager Rachel Nugent, alongside Jemma Jones, PwC Manager in Governance, Risk and controls then described how these attributes are being achieved in practice in organisations’ reporting across areas including strategy, operations, financial performance, risks, measures of success, and governance. They brought insights to life with excerpts from a wide range of public sector annual reports – from NHS trusts to central government departments to regulators and more – alongside relevant examples from the private sector.
Attention then zeroed in on accessibility, an attribute for which the assessors added extra marks in the screening process for the 2022 reporting award. Alex Worth, PwC Senior Manager in Governance, Risk & Controls explained how leading reporters are succeeding in improving accessibility, again citing real-world examples from both the public and private sectors, including PwC UK’s own 2022 Annual Report. There followed a brief Q&A where audience members raised issues such as how to streamline public sector reporting in the face of Parliament’s increasing requirements, and how to maintain the “golden thread” in a large, complex and devolved government organisation.
Navigating a shifting reporting landscape
Hannah Oliver of HM Treasury took the stage, providing the audience with an in-depth update on current developments in central government reporting, and useful guidance for organisations looking to navigate through it. The attendees gained valuable insights into the latest initiatives and likely future changes relevant to the public sector across areas including financial reporting, IFRS, budgeting guidance and thematic reviews.
Turning to the BEIS White Paper on 'Restoring trust in audit and corporate governance', Hannah said that while the White Paper didn’t specifically address proposals for reporting by public sector entities, HM Treasury would review where comparable changes to practice may be needed to keep pace with the private sector. She closed with a look forward to the rest of 2023, highlighting key developments in prospect in areas like the Government Financial Reporting Manual (FReM) and illustrative accounts and sustainability reporting under the Task Force on Climate-related Financial Disclosures (TCFD) standards. HMT are also aware of issues around local government reporting and pensions assurance and are working with departments affected by these issues. .
The closing Q&A…
Rounding off the event was a lively audience Q&A session involving all the speakers. Issues raised included pensions assurance in the public sector; the use of static pdf or interactive html formats; how to manage resource constraints; striking the right balance between accessibility and detailed information; and how to maintain consistency of tone and messages across an annual report. On this last question, PwC’s Phil Stokes stressed the importance of clear control over the end-to-end project. He explained: “When the winning organisations get up at the annual awards dinner, I'm always struck by how they’ve consistently had one person take responsibility for the front and the back half, making sure that these really do flow together – and understanding what the purpose of the annual report is, who the audience is, which stakeholders they want to talk to, and how best to tell the organisation’s story.”
…and building the future
Throughout the workshop, the overall consensus was that – despite the challenges – the quality of the best public sector reporting is on an improving trend, spearheaded by a group of leading innovators. PwC is committed to help foster better reporting across the public sector and beyond. To find out more, please feel free to contact PwC’s reporting team. The future of public sector reporting is taking shape. Together, we can build it.
