The Cities for Sustainable Public Finances (CSPF) network brings together seven European cities – Amsterdam, Barcelona, Bordeaux, Hamburg, London, Trondheim and Tallinn – to exchange on strategic approaches to municipal finances and good governance. The group meets twice a year, providing a platform for CFOs, finance directors and experts to share insights, compare challenges and jointly explore innovative solutions for sustainable urban financial management.
The guiding question of the 11th CSPF meeting, held online on 29 and 30 October 2025, was how local financial leadership can strengthen the institutional foundations on which democratic societies depend. In an era of accelerating climate risks, demographic change, political polarization and increasing pressure on public finances, strong institutions are a good measure of societal resilience. SDG 16 – Peace, Justice and Strong Institutions – is therefore no longer a distant global ambition but a daily municipal necessity. Within this landscape, CFOs play a central role: they safeguard fiscal integrity, guide responsible allocation of resources and ensure that commitments to openness, fairness and accountability translate into credible public action.
In short, there were 4 key takeaways:
1. Administrative capacity is a driving factor for effective policy implementation
The meeting opened with a presentation from the European Commission’s SG REFORM, which started originally as a task force during the Greek financial crisis. Their experiences from that time showed the relevance of targeted administrative and institutional capacity-building to regain trust from the public. These learnings contributed to the rationale for strengthening EU mechanisms in this field. The shared conclusion from the following discussion was that institutional capacity is the decisive factor behind effective policy implementation, especially when tied to EU reform priorities.
Participating for the first time, Tallinn demonstrated from a practical perspective how the organization shifted to a centralized procurement model which is transforming the city's capacity to manage over 300 contracting authorities. The city’s approach shows that procurement is not just compliance — it is a lever for quality, fairness and sustainability, integrating environmental criteria, social standards and innovation-oriented purchasing principles. Tallinn’s strong digital backbone underpins this progress, showing how administrative efficiency and financial integrity reinforce each other.
2. Using AI to enhance accountability, while keeping human responsibility
Barcelona showcased how artificial intelligence can be used in public auditing as a practical tool for strengthening SDG 16. Rather than replacing professional judgement, AI supports auditing teams by:
- executing routine auditing tasks more efficiently and in real-time,
- identifying anomalies, also in big data sets, more quickly,
- and enhancing transparency for citizens and audit bodies.
Barcelona’s pilot project uses AI not as an abstract innovation, but as a responsible, human-supervised instrument for stronger public oversight.
One other session provided an overview of several guidelines that Austrian municipalities currently rely on when working with artificial intelligence in their organizations. For example Vienna’s internal guideline is built on four principles: legality, efficiency, usefulness/innovation and ethical standards. It establishes that employees remain responsible for all AI-assisted content.
3. Sustainable Local Public Finances and budgeting as the core of SDG 16
In the context of local governments, SDG 16 is discussed primarily around the topics good governance, participation, transparency, anti-corruption and violence prevention. These are relevant indicators for achieving strategic goals of a city. But strong institutions are also capable of establishing performance oriented budgeting practices, that can further support the allocation of public funds to strategic priorities, for which the city is held accountable for. Strategic budgeting combined with transparent performance information and sound financial management is therefore a cornerstone for effective policy implementation.
Furthermore, large cities have the capabilities and resources to explore alternative funding possibilities from the capital market. The benefits of issuing Green and Social Bonds were discussed. Main motivations for this include aligning own investment and financing behaviour with sustainability strategies, diversifying the group of lenders (de-risking) and realizing lower financing costs (“greenium”).
4. Integrity, compliance and risk management as democratic security
The role of CFO’s in a new era of hybrid risk and geopolitical tensions was a further point on the agenda.
As trust in institutions is one of the targets of hybrid warfare, institutional integrity is a requirement in the context of national security. Corruption, opacity and weak procurement principles contribute to the vulnerability of national security. Hybrid-risk awareness should therefore be part of municipal risk management and procurement processes. Vendor and beneficiary screening must become routine to prevent engagement with designated entities and to secure supply chains. To achieve this, close coordination is needed across the departments of finance, information technology, security, and communications.
Municipal resilience improves when risk assessment is comprehensive, procurement transparent, and coordination continuous. Treating compliance as organizational hygiene produces measurable gains in stability and credibility. This recognition positions CFOs not only as financial stewards but also as guardians of institutional credibility.
Why this matters — and what comes next
As this meeting demonstrated, Europe’s cities continue to show that strong institutions are built through shared learning, collective ambition and disciplined financial stewardship. The CSPF network remains a unique platform where municipal leaders can co-develop approaches that reshape the future of local governance.
The group is looking forward to continuing this momentum at the next CSPF meeting in June in Tallinn, where cities will further exchange on future-ready municipal finances.
More information about the CSPF network and its activities is available at www.cspf.eu and www.slpf.eu.
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