By Nick Mann | 29 February 2012

Governments need to lay the foundations for a stable and lasting economic recovery by dealing with fiscal deficits, enabling growth and encouraging talent in the workforce, PricewaterhouseCoopers said yesterday.

In a report, Taking responsibility: Government and the global CEO, the accountants said that while developed and developing countries face different challenges, they all needed to maintain fiscal discipline while also coping domestically with the consequences of crises in other regions. The report is based on the results of a survey of company chief executives in 60 countries and interviews with 23 government officials worldwide.

Jan Sturesson, PwC’s global leader for government and public services, said: ‘All governments have a duty to focus on returns on investment and maximise value for taxpayers, whether or not spending is being reduced – whilst improving the quality of services delivered to the public.

‘One thing is clear: with an increasingly disruptive future, “business and government as usual” is not an option.’

Developing and executing plans to better balance public finances, focusing on cutting costs and finding new sources of funding should be among the priorities for governments dealing with deficits, PwC said.

They should also develop new approaches to workforce reform, innovate in service delivery – such as by making better use of the private and voluntary sectors – and improve accountability and transparency, it added. 

Governments have a ‘major responsibility’ for creating the right conditions for financially, economically and environmentally sustainable growth, the report said. In particular, they should focus on cities, which are a ‘key engine’ of sustainable growth, as well as clusters of economic activity and a ‘balanced, integrated’ infrastructure programme.

And they should also help businesses to meet their skills needs, it added. Scott McIntyre, global government and public services co-leader at PwC, said: ‘Collaboration between the public and private sectors is critical to the recruitment and retention efforts facing leading organisations.

‘Governments can do more to create an environment to overcome shortages in market skills and talent.’