CIPFA: Treasury move to split senior finance role a backwards step

4 May 17

CIPFA has criticised the chancellor for taking a “backwards step” in reversing reforms in financial management at the Treasury.

Philip Hammond has decided to split the role of director general of public spending and finance, which was created in 2014 as a response to overspending at the Ministry of Defence and health service.

For the last three years this job has been done by Julian Kelly, a qualified accountant, but now a head of public spending will remain in the Treasury while the financial management role is being moved to an as yet unspecified department.

The idea for the role in 2014 was to improve efficiency and financial management in Whitehall.

CIPFA chief executive Rob Whiteman said: “The decision three years ago to centralise the management of the public finance profession to the UK Treasury was a good and necessary one.

“Previously, one of the departmental CFOs would take on the leadership role for the entire civil service, alongside their other responsibilities. And it looks like this is now about to happen again.”

He said although progress has been done on improving financial management “much is still needed” and with this reversal of policy he said such improvement will be harder to achieve.

Whiteman points out more work was required to link business planning to financial planning so that efficiency measures and investment projects are fully costed and more effectively implemented.

He added: “We have seen, for example, areas like prisons and social services have money taken out only then to be reversed by the chancellor because the savings agreed were found to not be achievable.

“So I see it as a backwards step that HMT will still coordinate public spending, but not the finance profession working on its delivery.”

Kelly is moving to the MoD to the new post of director-general nuclear, his remit will be to keep the expensive Trident replacement submarine programme on track.

He will be replaced by James Bowler, current director-general for tax at the Treasury but as a non-accountant he will take on the public spending but not the finance aspect of the job.

A government spokesman said the appointment did not mean the Treasury was failing to take the issue of cost efficiency seriously, adding that dedicated staff and resources would continue to deliver the government’s aims on financial management.

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