By Richard Johnstone | 16 December 2013
The Treasury is to create the new post of director general for spending and finance after a financial management review concluded the role would strengthen value for money across government.
Publishing the results of the financial management capability review, Chief Secretary to the Treasury Danny Alexander said the post, similar to a chief financial officer, would build on reforms already introduced. These include the publication of the first ever Whole of Government Accounts.
The capability review, which was set up at the June spending round, was led by Sharon White, second Permanent Secretary to the Treasury, and Richard Douglas, the head of the Government Finance Profession.
Its key recommendation to combine the head of profession with the Treasury’s director general for public spending post to create the new director general post has been accepted by the government, Alexander said. This comes after civil service head Sir Bob Kerslake told Public Finance last month the review would recommend the formation of a stronger central financial management function in government.
The new role, which will report in to White, will have a formal management relationship with all Whitehall heads of finance. This is intended to strengthen financial leadership across government, and the post will also lead financial management reforms, the Review of financial management in governmentstated.
White was promoted from director general for public spending to her current role in October. Recruitment for the new role will begin in the New Year, and will be open to candidates from the private sector as well as public bodies.
Announcing the go-ahead for the changes, Alexander said constraints on public expenditure would be necessary for years to come as part of the government’s deficit reduction plan.
‘Within this context, it is more important than ever that taxpayers’ money is spent efficiently and effectively and that we maximise the value secured for every pound we spend,’ he added.
‘Strong financial management across central government has been, and will continue to be, critical to achieving this. I am confident that the recommendations contained within this review will deliver the necessary improvement in spending control and financial capability.’
The government has also accepted the review’s other recommendations, which call on the Treasury to allow departments to take greater responsibility for some areas of spending currently controlled by the centre.
The ministry will also work with the Cabinet Office to better align public spending across government departments, such as where expenditure cuts impact more than one area of spending. The ‘speed and quality of decision making’ should be improved within a corporate centre in Whitehall, the report stated.
Responding to the review, CIPFA chief executive Rob Whiteman said: 'It’s encouraging to see that the review has listened to finance professionals from both outside and within government and taken on so much of what CIPFA and others had recommended.
'We must now see action to make sure that this new bolstered role at the head of the profession has the authority and resources needed to secure good financial leadership across government, and to ensure essential improvements in governance, financial management and capability.'
The deputy director of the Institute for Government Julian McCrae said that the review was 'an important milestone in professionalising Whitehall’s finance function'.
The Autumn Statement showed austerity will continue for the foreseeable future, so stronger leadership of Whitehall’s finance profession, armed with better management information was vital, he said.
'We particularly welcome the chancellor and chief secretary’s commitment to appoint a qualified and experienced professional to lead change from within the Treasury.
'Bringing in someone with experience of leading a large, distributed finance function into the Treasury is a vital part of strengthening financial management across government. Most importantly this person should have the support from the top of Whitehall and the departments to succeed.'
