13 October 2006
Seventy per cent of senior civil servants could develop advanced financial management skills under Treasury proposals to prevent the sort of budget problems experienced by NHS trusts.
Treasury ministers and mandarins this week told Public Finance that they would overhaul Whitehall's financial skills by encouraging the senior civil service (SCS) to undertake a three-pronged training programme requiring comprehensive knowledge of budget management.
Stephen Timms, Chief Secretary to the Treasury, said improvements were necessary 'to embed a culture of confidence in the public' following a series of failures and deficits across public bodies.
'We need to evaluate performance by measuring outcomes and knowing what it cost to achieve those outcomes – that's the only way we can make informed choices in managing expenditure,' he said.
The initiative was formally launched this week under the auspices of the National School of Government, the civil service training body, but has been personally endorsed by Chancellor Gordon Brown. Ostensibly the training is voluntary - but Treasury mandarins are actively encouraging departmental managers to push staff through the system.
One mandarin told PF that Brown has been 'frustrated' by financial failures at central government departments and other public bodies 'that have employed senior finance staff, and other staff who manage and spend budgets, without adequate professional training and experience.'
Brown feels that financial difficulties across organisations – including the 33% of NHS trusts revealed to be in deficit this week - have stymied Labour's public services reforms.
Brown is also concerned that poor financial stewardship could hinder central government after he publishes his Comprehensive Spending Review 2007, which will impose tight restrictions on departmental budgets and simultaneously demand improved services and productivity.
In response, Brown's finance team, in partnership with the NSG, has developed Finance skills for all, which was launched on October 10. The programme, part of the Cabinet Office's Professional Skills for Government initiative, is largely aimed at managers who currently lack professional financial training. The first stage, aimed at all civil servants, is a basic e-learning programme.
The intermediate level provides staff with a series of half-day, face-to-face programmes tackling advanced financial issues such as resource-based management, business planning and market economics.
The final phase, aimed at SCS level, includes a series of 'masterclasses' in financial management. Among these requirements, trainers will simulate theoretical financial “crises” at public bodies that must be tackled.
The NSG has selected four organisations to assist with the intermediate training, including CIPFA. Adrian Pulham, education and training director at CIPFA, said the initiative could 'substantially enhance' public finance skills.
Mary Keegan, managing director of government financial management at the Treasury, told PF it was 'perhaps no coincidence' that one involved rescuing a troubled NHS trust. Others include the smooth financial stewardship of the Olympic Games.
Keegan said her aim was to encourage 70% of the SCS through the intermediate stage of the programme by 2007 and, eventually, 50% through the advanced stage.
Nick Macpherson, Treasury permanent secretary, said the biggest challenge would be to change Whitehall's skills culture. 'It's going to be an uphill task,' he warned. 'For a long time in the civil service, finance was seen as something which was slightly grubby and [civil servants] asked why they should bother themselves with it.'
Timms said that the new training requirements should extend to civil servants delivering services.
'People in charge of delivery need to be very good at financial management – we need a culture of managing by numbers rather than by instinct,' he said.
PFoct2006
