Kerslake signals further Whitehall finance reform

30 May 13
Whitehall’s finance function could undergo further reform as part of coalition efforts to modernise the civil service, Sir Bob Kerslake has revealed.

The civil service head told Public Finance an evaluation of the Whitehall reform plan would be published in July to review the progress made so far.

In an exclusive interview, Kerslake said this paper would also indicate areas for further action.

He admitted the government had made ‘a bit of a slow start’ when the Civil Service Reform Plan was first launched in June 2012, but insisted ‘it is now moving forward at pace’. Progress has been made on ‘foundation’ areas of the reform plan, such as determining which skills and capabilities need to be developed across Whitehall, and steps have been taken to improve the commercial skills of civil servants.

However, implementation of other aspects needed to quicken, Kerslake added. ‘We know we’ve got other things to focus on, and there’s no room at all for complacency – we’ve a lot more to do.’

Part of the plan being considered for further changes is the role of the finance function across Whitehall, he told PF

The initial reform plan states that financial management across government would be strengthened, with the Finance Transformation Programme intended to give finance functions in departments and agencies greater authority.

However, Kerslake indicated that this was being re-examined: ‘We’re looking at the core functions across the piece, not just finance, but also HR and other areas.

‘Is there an argument for changing the way they’re done in government?

‘That’s definitely one of the areas we’re exploring at the moment.’

Although he could not yet say which changes would result from this, Kerslake indicated that programme and process management were among the areas being looked at.

His comments follow the Institute for Government’s review of finance skills in the Financial leadership for government report, published in April. It concluded that the finance function could do more to inform performance management, with the Treasury given a wider role to support value-for-money initiatives across Whitehall.

Responding to Kerslake’s comments, IfG deputy director and report author Julian McCrae told PF that examining reforms ‘in a wider context of the functional elements of government was very sensible’. He added: ‘I would really encourage them to look at how you can better run government in a way that actually helps, like the provision of management information, and how the strategic role finance plays can help improve management information.

‘What I hope they’re doing is asking, “What are the recurring problems across departments, and how could the Treasury and Cabinet Office really help them improve across the piece? How do they link inputs to outputs and outcomes in ways that are more meaningful than just how much they’re spending?” There’s a whole set of issues that the Treasury has not historically focused on, and we think there’s a case they should look at this.’

Kerslake also told PF that the government would expand its shared-services initiative across more departments in the coming year.

The first of a ‘next generation’ of shared-service centres ­– where the Department for Transport and its agencies currently share functions such as finance transactions, payroll, HR and some IT services ­– would be expanded to allow additional departments to join.

Examinations of previous cross-government sharing programmes by the National Audit Office have found they were often more expensive than predicted, leading to increased costs.

However, a new round of mergers is intended to save as much as £600m.

As Kerslake explained, ‘the main criticism in the past is that they haven’t really happened properly’, with each department still demanding a tailored specification. But there’s now ‘a very big determination to make these happen’. To ensure the programme is successful, the Cabinet Office’s Efficiency and Reform Group will devise ‘a properly resourced management approach’.

Eventually, departments will be able to choose from a number of centres, Kerslake added, with a second ­– initially focused around the Department for Work and Pensions and its agencies - currently being developed.

‘I would expect us to see savings over the next couple of years, and I think there will be.’


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