Khalid Hamid, CIPFA Director of International
While public sector organisations around the world grapple with a myriad of immense challenges, from political instability to mounting economic and financial pressures — there remains a persistent threat: corruption. For public finance professionals, understanding and addressing corruption is not optional; it remains a significant and ongoing risk that demands constant attention.
In fact, this year's corruption perception index (CPI) has confirmed a worrying trend. The report, released annually by Transparency International, evaluates 180 countries and ranks them from 0–100, with zero being highly corrupt and 100 being very clean. The latest edition shows that the UK has dropped out of the top ten, with a score of 71, which is a record low.
The UK score has been decreasing since the mid-2010s, which raises concerns around both the implementation and enforcement of anti-corruption measures, which ultimately can work to erode public trust in institutions. Similarly, Europe has not fared well in the most recent report, with 19 out of 31 European countries declining and only six improving their score.
Corruption is a notoriously difficult thing to quantify, and so many different individual actions can fall within this umbrella term. The index first and foremost is based on perception, so it’s important to note that this data has its limits. That being said, it remains an important indicative measure of global corruption, and also a stark warning for all countries on how things can and do change over time. It is crucial that levels of corruption are monitored, to ensure that public money is used effectively, as facing the problem head on is the first step in tackling it.
We cannot simply pretend that corruption does not exist in public sector organisations. It happens and being aware of the realities of how corruption occurs will enable public finance professionals across the sector to better assess and mitigate risks, where possible. Because of the dynamic nature of corruption, we will never be able to completely eradicate it. However, we can make incremental improvements and increase transparency and accountability, making it harder for those engaging in corrupt behaviour.
CIPFA believes that the most effective way to tackle corruption is to attack it from both sides — investigation and prevention.
A preventative approach means embedding anti-corruption measures into everyday operations — strengthening financial controls, improving procurement transparency, conducting regular risk assessments, and training staff to spot early warning signs. It also requires leadership to set a clear tone from the top, creating a culture where integrity is the norm, not the exception.
We continue to advocate for a prevention-based approach as a priority, as it represents better value for money for the taxpayer. Once money has been lost to corruption, whether intentionally or unintentionally, resources and time will be wasted to try and recover it. It is imperative that front line staff and senior management teams across the public sector dedicate themselves to prevention, and contributing to an institutional culture centred on integrity and accountability.
The first rule of good public financial management is to make the most of the public pound. Not only does preventing corruption make sense from a financial point of view, but it is also paramount in retaining public trust in our organisations, which seemingly appears to be declining around the world. As public finance professionals, we must take practical steps within our own functions and careers, to reduce the evolving threat of corruption.
Find out more about how CIPFA can help your organisation tackle corruption.