As we move into the second half of 2024, several emerging trends are set to shape the landscape of public finance. These trends encompass political upheaval, technological advancements, regulatory changes, and economic forecasts, each playing a pivotal role in the evolution of financial management in the public sector.
Political Upheaval: Political stability and the recent change in government will significantly impact UK public finance. The newly appointed Angela Rayner as the Secretary of State for Housing, Communities and Local Government suggests significant importance is being placed on the local government sector. Whilst Council tax reform wasn’t explicitly ruled out, this does remain unlikely in the near term. The same applies to business rates. Treasury managers must remain adaptable, monitoring political developments closely to anticipate and respond to policy changes. Potential political turmoil in the USA is anticipated to bring both opportunities and threats in terms of interest rates and potential for significant macroeconomic boons for UK businesses. Arlingclose will continue to remain abreast of ongoing updates and changes in this area.
Regulatory Changes: In the second half of 2024, we anticipate substantial regulatory changes aimed at promoting fiscal responsibility and transparency. Governments worldwide are likely to implement stricter regulations to address issues of public debt and ensure sustainable financial practices. Additionally, there is a growing emphasis on Environmental, Social, and Governance (ESG) criteria in local government. Policies promoting green bonds and sustainable investments are expected to become more prevalent, aligning public finance with broader sustainability goals.
Economic Forecasts: Economic forecasts for 2024/25 suggest a cautious yet optimistic outlook. While global economic recovery from the cost-of-living crisis continues, challenges such as inflation and geopolitical tensions remain. Local authority treasury managers must navigate these uncertainties by adopting flexible and resilient financial strategies. Emphasis will likely be placed on enhancing revenue generation through diversified income streams and prudent fiscal management to mitigate potential economic shocks; both areas Arlingclose can provide significant assistance.
The future of public finance in the remainder of 2024 is poised to be dynamic; regulatory evolution, and economic adaptation. Public finance professionals must stay abreast of these trends to effectively manage resources, ensure transparency, and support sustainable economic growth. By leveraging technology, adhering to new regulations, and preparing for economic fluctuations, the public sector can achieve more robust and forward-thinking financial management.
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