Whitehall held back by lack of financial management skills

13 Jul 11
More than 80% of senior civil servants believe the government lacks financial management skills, a National Audit Office survey has revealed today.
By Richard Johnstone | 13 July 2011

More than 80% of senior civil servants believe the government lacks financial management skills, a National Audit Office survey has revealed today.

The NAO found weaknesses in departmental strategies and governance arrangements for identifying and addressing skills needs across government. It has concluded this could affect value for money.

In a survey of 89 senior civil servants, including finance and human resources managers, the NAO found that financial management was the area perceived to have the third biggest skills gap. It came behind programme and project management and information and communication technology. Almost four in ten respondents felt they had very or fairly significant gaps in financial management in their departments, with a further 44% identifying minor gaps. Only 12% thought there were no gaps.

Overall, 78% of respondents said there were ‘significant skills gaps’ in their organisations.

The NAO found these gaps could have a significant impact on government’s ability to meet its objectives, as departments had not been effective in managing their skills development programmes.

Government training also ‘does not represent value for money’ due to fragmented accountability for development. Most of the 13 departmental skills strategies covering 2008–2011 examined by the NAO did not define current and future business needs clearly, and failed to ensure training activities matched them.

Auditor general Amyas Morse said: ‘Tight public funding means that departments must find ambitious new ways of working to maintain and drive up levels of performance. Key elements of success will be knowing what skills are needed and which staff have them, and then deploying those staff to where they are most needed. These key elements are not presently in place in many departments and need to be driven urgently to be in step with major change programmes.’

The NAO also found ‘obstacles’ to ensuring posts were filled by staff with appropriate skills, with the ‘standards associated with particular professions not always reflected in recruitment to posts’. In some parts of government, staff did not always stay in post long enough to develop the necessary experience, as the ‘generalist’ rather than specialist model persisted, leading to the frequent rotation of staff.

Adrian Pulham, CIPFA’s education and membership director, told Public Finance that the concerns on financial management skills came as no surprise.

He said: ‘It’s something that CIPFA has been aware of for some time and something we have worked with government to correct. We have been involved in ensuring that finance directors in government are professionally qualified – 100 have become CIPFA members as a result of the programme that we have run, based on a concern that people were properly qualified.’

However, he added that the generalist model might cause difficulties in getting the right specialist staff in place. ‘CIPFA holds the view that finance professionals are best qualified to provide financial management in government. If you move them around then you fail to get the value of the professional qualifications and people never get the chance to put their skills into practice.’


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