The Focusing on value creation in the public sector report has been developed with support from the World Bank’s Governance Global Practice.

It provides guidance for public bodies to help them think holistically about their strategy and plans, make informed decisions and manage key risks, in order to improve future performance and build stakeholder confidence.

The 46-page report sets out best practice, plus a number of case studies demonstrating how integrated reporting is used in a practical context.

In a UK context, there is a review of how the Crown Estate uses integrated reporting as a UK-based independent, commercial business, created by an Act of parliament and returning all its profit to the Treasury. It has an extensive portfolio of assets, including London’s West End, regional retail, rural land, half the foreshore and the UK seabed.

Integrated reporting allows public sector organisations to demonstrate effective resource allocation and accountability – communicating not just for the sake of ‘being transparent’ – but to ensure all stakeholders understand how their organisation is creating value in the short, medium and long term.

An integrated report should provide insight into the organisation’s strategy, and how it relates to the organization’s ability to create value in the short, medium and long term, and to its use of and effects on the capitals.

Rob Whiteman, chief executive of CIPFA said: ‘We believe this report will help to improve decision making and illustrate how integrated reporting can be applied by public sector leaders so that they think more broadly about value creation in their organisation and make the best use of the often restricted resources they rely on.

‘Integrated reporting will enable them to think about the outcomes they are aiming for – not only in financial terms, but also in terms of society, the natural world, and human and intellectual capital.’

Professor Mervyn King, chairman of the IIRC Council, said: ‘Public sector organisations are increasingly challenged with maintaining or improving outcomes within the same or reducing resources. Communicating how, and how well prepared they are to achieve this is critical to public accountability.’

The report also highlights some of the key drivers for integrated reporting following research into perceptions by major companies and organisations, published in a 2015 paper – Integrated thinking: An exploratory survey produced by the South African Institute of Chartered Accountants (SAICA).

These include:

• changing business circumstances that required a significant change in strategy;
• enlightened leadership at board or chief executive officer level;
• meeting the needs of stakeholders, especially with regard to social and environmental issues;
• the complexity of the business;
• a need to enhance risk management;
• adoption of matrix organization structures; and
• a remuneration strategy linked to improved integration, coupled with appropriate key performance indicators (KPIs).

In 2017 CIPFA and the IIRC plans to release detailed guidance on how to implement the International <IR> Framework for public sector organisations.

The IIRC CIPFA report Focusing on Value Creation in the Public Sector is available here