The past 18 months have placed local government at the centre of the public sector agenda, especially with the largest council in Europe issuing a Section 114 notice last year.
Of course, it is the S151 officer, usually the chief financial officer, who has ultimate responsibility for taking the decision to issue an S114. But, while the process follows a clear legislative path, let’s make no mistake that the consequences of this decision reverberate both politically and emotionally throughout the local community and the wider public sector.
Against this backdrop of ever-increasing pressure to balance the budget, find more and more cash down the back of the sofa and make difficult decisions that will affect thousands, the role of the local authority CFO has also become increasingly diverse and multifaceted.
Demands
In CIPFA’s updated publication, The Role Of The Chief Financial Officer In Public Service Organisations, we take a deep dive into the expectations of a modern CFO, what skills they need to be efficient and effective and what extra challenges they should now expect to land on their already busy desk. Although this report is focused on CFOs in the wider public sector, it is, of course, very applicable to local government too.
Gone are the days where a CFO could rest assured that they were only there to keep an eye on the finances. Now, they need to be across all of the issues that a public sector organisation faces, such as climate change, equality and diversity and cyber threats. They need to navigate economic and political instability and are also expected to be a suave political operator, experienced in dealing with ambiguity, conflicting stakeholders and a difficult policy landscape in order to deliver for their organisation and, more importantly, the communities who depend on it.
On the back of this publication, I, along with 65 local authority CFOs, headed to Warwick for CIPFA’s annual CFO retreat. It was a chance to spend two days discussing the challenges, concerns and crises that CFOs now grapple with on a daily basis. This time, discussions were understandably dominated by the spate of S114s we’ve witnessed, but we also got the chance to talk about other important issues, such as sustainability, prevention in health and social care, local audit and recruitment and retention.
Advice
What really came through during the discussions was that having a mix of people and opinions at the top table is vital. CFOs need to get expert opinions even if they don’t like what they have to say. They should involve auditors and stakeholders early in the process to ensure transparency and appreciate that spending time discovering where things went wrong is just as important as working out how to recover.
We must also distinguish between the business-as-usual role of a CFO and their part in recovering from an S114 – they cannot do both.
The discussions showed how willing CFOs are to step out of their traditional comfort zones to tackle people issues, such as recruitment, retention and equity, diversity and inclusion. Above all, they need to be passionate about delivering positive outcomes for their local communities.
Perhaps the only certainty in this incredibly volatile period for local government is that the future is destined to be uncertain. CFOs will need to be increasingly adaptable and dynamic, able to respond to crises on many fronts – not least, financial – as they navigate difficult paths.
As one delegate at the retreat commented: “A local government CFO is about making a real difference to people’s lives.” I couldn’t agree more.
