1. Government Finance Profession Annual Conference 19 th and 20 th November 2009 Margaret Ewing Partner and Vice Chairman Deloitte Managing Out of a Recession Perspectives from the Private Sector

2. 1© 2009 Deloitte LLP. Private and confidential Managing Out of a Recession Perspectives from the Private Sector – Overview Perspective of the Private Sector CFO Today Priorities for Finance Today Your Key Challenge - Lessons from the Private Sector What Next?

3. Perspective of the Private Sector CFO Today Managing Out of a Recession Perspectives from the Private Sector

4. 3© 2009 Deloitte LLP. Private and confidential Deloitte CFO Programme – access to and insights of CFOs of UK’s major corporates Deloitte quarterly UK CFO survey: launched September 2007 the benchmark of UK corporates’ financial appetite and attitudes regularly cited in the quarterly Bank of England's Inflation Report and key financial media etc early survey results provided to brief BoE's Monetary Policy Committee 120 CFOs, accounting for 27% of quoted market, took part in 2009 Q3 survey Managing Out of a Recession Informed

5. 4© 2009 Deloitte LLP. Private and confidential Managing Out of a Recession Optimism Net % of CFOs who are more optimistic about financial prospects for their company now than three months ago Financial prospects

6. 5© 2009 Deloitte LLP. Private and confidential Managing Out of a Recession Financial Risk Decreasing Net % of CFOs who think financial risk on their balance sheet has increased over the last 12 months Financial risk

7. 6© 2009 Deloitte LLP. Private and confidential Long term effects of credit crunch Managing Out of a Recession Lasting Change % of CFOs who expect the following to happen

8. 7© 2009 Deloitte LLP. Private and confidential Managing Out of a Recession Emerging Recovery Response Corporate strategies % of CFOs following or likely to follow the strategies below in light of the expected upturn

9. Priorities for Finance Today Managing Out of a Recession Perspectives from the Private Sector

10. 9© 2009 Deloitte LLP. Private and confidential Priority to date – “steadying the ship” Focus on cash, funding, working capital and costs Priorities tomorrow – being addressed TODAY Information for decision-making Business partnering Delivery of sustainable cost reduction But fundamental and urgent requirement Increased focus on Finance talent agenda Developing wider skills and relevant capabilities within Finance Managing Out of a Recession Finance’s Role in the Private Sector Transition

11. 10© 2009 Deloitte LLP. Private and confidential Treasury told public sector can save £9bn The public sector can make another £9bn a year of efficiency savings by 2014, reviews commissioned by the Treasury have concluded. Cost-cutting authority is a taste of things to come Many Conservative councillors and activists are privately enthusiastic about the possibility of major changes to public services so as to make it possible to cut costs............ Gordon Brown's fire sale of public assets to raise £16bn Managing Out of a Recession Finance’s Role in the Private Sector Transition

12. Your Key Challenge – Lessons from the Private Sector Managing Out of a Recession Perspectives from the Private Sector

13. 12© 2009 Deloitte LLP. Private and confidential Own the agenda Manage scope of review Create timelines and schedules Manage process Manage analyse and assess process Drive regular review process Boss the numbers Lead opportunities assessment Own reporting and tracking mechanisms Empower the business Provide training in cost management tools/ techniques Centrally source and provide benchmarking data Drive communications Ensure that cost management gets constant visibility in organisation Shape policy Set and enforce critical policies: delegated authorities, spend approval limits and policies Managing Out of a Recession Sustainable Cost Reduction – The Role of Finance

14. 13© 2009 Deloitte LLP. Private and confidential Strategist / Catalyst Source: Deloitte Research Managing Out of a Recession Finance Characteristics – The Four Faces of Finance Steward / Operator 35% 40% 25% Low High Low High Strategist / Catalysts Finance d’vpmt path Laggards Mediocres Finance Function

15. What Next? Managing Out of a Recession Perspectives from the Private Sector

16. 15© 2009 Deloitte LLP. Private and confidential Finance has leading role to play as we manage out of a recession – in private and public sectors Challenges facing finance professionals have many similarities in both sectors – but some key differences What can you do to play your part? Improve your capabilities and skills in understanding relationships between: - costs and outcome - forecasting and planning - business partnering and relationship management Provide leadership within your Department, particularly around prioritisation of programmes and services in context of reducing expenditure Managing Out of a Recession What Next?

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