Finance departments 'under pressure' as cull commences

25 Jan 11
Local government finance jobs have been thrust into the spotlight as councils prepare their budgets and reorganise services in the shadow of a finance settlement that was tougher than many expected.

By Lucy Phillips

26 January 2011

Local government finance jobs have been thrust into the spotlight as councils prepare their budgets and reorganise services in the shadow of a finance settlement that was tougher than many expected.

Early indications suggest that the finance function will not be immune from the squeeze on services and staff. Plans from Birmingham City Council, for example, show it is hoping to achieve above-average savings from its corporate resources department between 2011/12 and 2014/15, cutting 518 full-time equivalent posts out of a 1,365-strong directorate.

London’s Hammersmith and Fulham Council is currently considering sharing its finance function with neighbouring Westminster or Kensington & Chelsea. A spokesman said the council was doing everything possible to protect frontline staff.

‘There are likely to be in the range of 700 job losses, and they will be back-office, management and administration rather than people on the front line,’ he said.

Meanwhile, Norfolk County Council has scrapped the post of director of corporate resources altogether in an attempt to save £200,000 a year.

Oversight of the role will be covered by the council’s chief executive, and the head of finance remains in his job.

Tony Travers, director of the Greater London Group, told Public Finance that finance departments were going to ‘come under a great deal of pressure’ as councils attempted to protect frontline services in the face of a push from Whitehall to cut staff and merge departments.  

Unions agreed that this, along with demands to outsource to other sectors, would inevitably lead to finance job losses.

Research from CIPFA confirms the trend more widely. The institute’s annual budget and council tax survey revealed that almost four in ten (38%) councils would be making more than 30 staff redundant in back-office functions, including finance. Sixteen per cent said they would be reducing their back-office staff by more than 100.

Finance, along with HR and IT, was among the council services deemed most at risk of budget cuts, with over three-quarters (76%) of finance directors saying their own function was quite or most vulnerable. Only public libraries, arts and museums were judged to be more at risk.

The survey, answered by 166 finance directors across Britain, was conducted shortly before December’s local government finance settlement.

Alison Scott, CIPFA’s assistant director for local government, said it was inevitable the initial focus would be on back-office efficiency. ‘Councils need to balance financial management needs against the requirement to cut,’ she added.

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