By Manj Kalar | 1 July 2013
As the June Spending Review extends austerity cuts across government, ‘smart skills’ will be essential for Whitehall finance staff to address the challenges
As we begin to digest the full impact of Chancellor George Osborne’s June 26 Spending Review, one thing is clear – we really are ‘all in it together’. Further cuts will be required across central government and local government for 2015/16, the year covered by the review.
Spending Review 2010, which covered the four years from 2011/12 to 2014/15, placed relatively greater upfront cuts on local government bodies, so many of these have been implemented now. Central government departments have made some cuts but not of the same magnitude. This will now have to change.
It is said that ‘change is a constant’. Perhaps in this era of austerity, it should be rephrased ‘cuts are a constant’. Tight fiscal discipline will be required for some time to come. Difficult choices lie ahead concerning the fundamental raison d’être of public services and the nature, scope and mode of their delivery. In this environment, the finance professional is critical to ensuring decisions are soundly based. And to this end, increasing the professionalisation of the civil service has been a consistent theme.
The Cabinet Office set the agenda in its Civil service reform plan, published in June 2012. This was followed by Meeting the challenges of change: a capabilities plan for the civil service. The core focus is to extend professionalism in the civil service to beyond the 24 professions identified. Finance is but one of these. The challenge now is to ensure that finance professionals are at the heart of the coming cuts decisions.
This might seem a ‘no-brainer’ – something that council finance professionals will take for granted, but peers in central government are often seen as the poor relations compared with those from other professions.
So what should we in the central government finance profession do to change this? First, we need to ensure that we remain relevant and really meet the organisation’s needs. Secondly, we need to keep our skills up to date – taking up any offers of Continuing Professional Development.
Thirdly, and arguably most importantly, we need to help lead the change agenda using our expert or ‘smart’ skills. Smart is the term increasingly being used for people-orientated or soft skills; skills that finance professionals are too often accused of lacking. Using the phrase ‘soft skills’ masks both the difficulties of acquiring them and their importance to career development and fulfilment. ‘Smart skills’ is more apt. How we develop and use our professional skills to support public sector leaders depends on how well we can: influence their agenda; communicate financial issues in a way that can be understood by colleagues from other disciplines; and really engage with the organisation – to help achieve the public’s expectations with ever reducing budgets.
One of the greatest difficulties with the Spending Review totals that have now been agreed will be finding the next areas to be cut. Over the years the low-hanging fruit have gone, so further change will require something radical. Some of this is reflected in the Civil service reform plan, for instance, the decision to become ‘digital by default’, in recognition of the fact that 80% of UK adults are now online but only 50% of government services.
So while there is scope, such change will be neither easy nor simple, as Public Accounts Committee chair Margaret Hodge has pointed out. She called into question the planned savings assumed to arise from the Universal Credit being provided online, pointing out that less than 20% of the ‘customer’ base had internet access.
Other potential changes include sharing professional resources across boundaries. Local government already has a track record here, with initiatives such as the three London boroughs sharing generic services and chief executives – Hammersmith & Fulham, Kensington & Chelsea and Westminster City Council.
Central government has started sharing functions such as internal audit and is looking to increase this over time – and there is much to learn from increasing joint working across disciplines with the introduction of joint commissioning boards.
However, in the longer term, there will undoubtedly be tough decisions about the public services ‘offer’. In the meantime, finance professionals must ensure they equip themselves with the hard and smart skills to stay one step ahead of all the other professions. Evolution will be the key to survival.
Manj Kalar is CIPFA’s technical manager for central government and financial management. CIPFA is helping those working in central government by running two free conferences: in Liverpool on September 11 and in London on September 18
This article first appeared in the July/August edition of Public Finance
