Finance function faces integration across government

9 Jul 13
The government’s review of financial Whitehall management will examine the possible integration of functions across departments, the Treasury’s director general of public spending has revealed.

By Richard Johnstone | 9 July 2013

The government’s review of financial Whitehall management will examine the possible integration of functions across departments, the Treasury’s director general of public spending has revealed.

Sharon White told an Institute for Government event that the review, announced last month by Chief Secretary to the Treasury Danny Alexander, would ‘look at the relationship between finance directors’.

She said there was ‘inevitably a push’ to look at the possibility of some functions being integrated across government ‘as Whitehall gets smaller and leaner’.

It was time to look at ‘what’s the model for a small department for their HR professional, finance professional and ICT professional’, she said. However, this would be ‘not quite a shared services model’ that has been used by some councils.

White’s comments come after the head of the civil service, Sir Bob Kerslake, told Public Finance in May that the finance function faced further reform.

Speaking at a debate on financial leadership in Whitehall yesterday, White stated that recent years had seen some ‘solid’ improvements, including the publication of two years of Whole of Government Accounts.

However, following the Spending Review last month, ‘it is clear to me that, despite the progress we have made in the Treasury, there is still quite a long way to go before I can say the Treasury, never mind Whitehall, is consistently excellent at financial management,’ White added.

The review will therefore examine financial capability across government. ‘Are we clear about what the baseline financial capability is in departments, and how do we up-rate that, being mindful of the variable geography of Whitehall, between small and larger departments,’ she said.

Possible reforms to the current model of accountability, where accounting officers such as permanent secretaries are given responsibility for the day-to-day management of spending, will also be considered.

However, changes to the current system would not be intended to increase Treasury’s control of departments, she added. ‘The question of how do we get to the right financial management within a structure. I don’t think anyone wants to see the Treasury become a department of 10,000 people scrutinising the last detail of every department’s line item.’

Recommendations from the review will be made to the chancellor and chief secretary by the end of the year.

White added that the publication of the WGA represented a step towards ‘what is seen as routine in the private sector beginning to be taken seriously within Whitehall’.

The intention is to publish the latest consolidated accounts, for 2011/12, before the summer parliamentary recess on July 18. This would be a similar timeframe to last year’s publication, when the unaudited version of the WGA was also published in July – 15 months after the end of the financial year.

Eventually the intention is to complete production of WGA within nine months of the close of the financial year, she added.

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