22 February 2008
Six central government departments, spending a total of more than £45bn, do not have a professionally qualified finance director on the board, more than a year after a Treasury deadline.
The National Audit Office found that management of central government financial resources – expected to grow to £678bn a year by 2010/11 – had improved since 2003.
But the watchdog revealed that the six departments, which include the Ministry of Defence and the Department for International Development, and account for 8% of all central government spending, failed to meet the Treasury requirement that they have a qualified finance director on the board by December 2006.
The NAO report, Managing financial resources to deliver better public services, published on February 20, also warns that just 40% of departments provide a full analysis of the financial implications of policy proposals to ministers or board members.
The report adds that financial matters 'do not automatically feature' in performance assessment criteria for permanent secretaries and other senior civil servants. The NAO found no improvement in departments' forecasting of how much money they need each year, particularly in relation to capital spending.
Departments were required by the Treasury to state the cost of meeting their strategic objectives. Although some departments had brought together financial and service delivery information, more than half had not, the NAO noted.
Despite Treasury guidance saying departments should aim to have a rolling three-year corporate business plan, 43% of departments either had no business plan or one that covered only a single year.
Half of departments either had no capital investment plan, or had one that covered just one year.
Tim Burr, head of the National Audit Office, said: 'Departments' financial management has improved since 2003. But… there should be no let-up in the government's efforts to extract maximum value from its use of taxpayers' money.'
But Commons Public Accounts Committee chair Edward Leigh criticised the lack of finance expertise at the top. 'I have to wonder if financial management is being taken as seriously as it should be,' he said.
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