[Skip to content]

Public Finance logo

News and expert comment on public policy and finance

Public Finance Google plus Public Finance Facebook Public Finance Twitter Public Finance YouTube
.

Complicated financial models ‘costing Whitehall millions’

By Vivienne Russell | 21 February 2013


More than £70m is being wasted across Whitehall every year because civil servants cannot understand the complex financial spreadsheets and models prepared by their colleagues, it has been claimed.

The Fast Standards Organisation has been formed to promote the use of accurate, standardised and transparent financial models that are globally understood. In research published today, it said opaque financial modelling fuelled inefficiency, a lack of professionalism and costly procurement errors such as the one that plagued the re-tendering of the West Coast mainline franchise. The FSO estimated that the costs to the wider economy are £300m a year.

Kenny Whitelaw-Jones, an FSO board member, said: ‘No major budgeting decision is government or business is taken without a financial model being created, yet finance professionals have no common spreadsheet modelling language or standards to work from.

‘The waste and extra work this creates is costing taxpayers at least £70m a year on our most conservative estimates and the damage to the broader economy is outrageous – certainly reaching hundreds of millions and possibly billions of pounds.’

The FSO has been launched to promote and maintain the Fast Modelling Standard, a commonly understood language for financial modellers. Several major accountancy firms, including Deloitte, Grant Thornton and Mazars, are backing the initiative.

Neil Rutledge, a partner at Grant Thornton, said: ‘Adopting the standard has had direct benefits to our business. It’s helped us improve our service to our clients, while at the same time reducing our risk.’

He said the standard should also be adopted across local government. City of Edinburgh Council is saving £100,000 a year following the adoption of Fast modelling.

‘What we’re seeing in local government is that while Fast has clear benefits when preparing forecasts that support major decisions that affect citizens’ lives, there are also enormous savings to be had by adopting a standardised approach when consolidating and analysing historical financial information.’

The FSO is seeking a meeting with the Cabinet Office to present and discuss its findings.




CIPFA logo

» Indicates required fields

PF Update
Public sector news direct to your inbox
Are you a CIPFA member? »
PF Jobsite logo

Latest vacancies

Comments
Interesting but I don't trust the 'answer' which is being proposed. Nothing replaces knowledgable, trained and experienced people who can think and use their judgement - a standard template to deal with every situation doesn't solve the problem.

Steven Boxall (22/02/2013 12:29:43)