Global city growth is dependent on certain physical and fiscal conditions being in place for private and other forms of investment. Appropriate services to engage the local economy and build resilience are also important in realising sustainable, inclusive growth, while local institutions and people are key to economic success and the enhancement of citizens’ well being.
Whole system approaches to such smart growth in global cities are mutually reinforcing and intrinsically linked to robust public financial management. PFM plays a crucial role in attracting and promoting sustained economic investment into a local economy from both domestic and international investors across government, non-government and private sectors. It also builds city financial resilience and sustainable development, promoting the effective and efficient delivery of government and other basic and essential services.
Good PFM provides leaders and managers, citizens and investors with information for better decision making and it helps provide better targeted services. Good PFM is also conducive to enhanced productivity, economic growth and higher levels of local revenue, and ensures that local, domestic and international taxpayers, funders and investors get a better return on their investment.
This will not only help to eradicate any deficit between the amount of local taxes raised and the cost of public services in cities, but also put them on a more sustainable financial footing given the impact changes in the world economy can have on local authority financing.
Good PFM places cities in a strong position, with a durable city financial administration for growth. It provides citizens, communities, cities, sub-regions, regions, nation states – as well as collective activities amongst regional states – with the opportunity to optimise the productive capacity in cities, maximising opportunities to benefit from the creation of surpluses. This enables cities to be creative and innovative, and to develop growth cultures to compete successfully on the global stage.
A whole system approach incentivises and engages cities and businesses to create an over-arching growth objective and whole process for city growth. Recent surveys of businesses have found high levels of interest in engaging with city authorities, but lower levels of satisfaction in communication where this occurred. This is the premise for recent CIPFA work with Growth Coalitions on a systematic approach for city growth, and shows the potential to use good PFM to engage city authorities and business in private and public investments.
The CIPFA initiative promotes growth-promoting partnership action among key stakeholder investors, service providers, citizens and their representatives in cities. It identifies the critical role of the city administration’s chief financial officer as a key, sustained local resource in assisting elected leaders’ and chief officers’ partnership based growth efforts for global cities.