Lambeth finance department

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For many years, the London borough of Lambeth had been synonymous with a culture of financial mis-management and non-payment. Today, the borough is transformed and is now an aspiring, ambitious council that has developed a new vision.

‘There is external recognition for the team’s performance via independent observers and it shows the ability to collaborate with external partners successfully,’ said the judges.

The finance team is a key element of its management. While still committed to getting the basics right, the team is actively developing strategies to deliver a better future.

The finance department has balanced the budget and linked financial resources to reflect the council’s priorities. This has been achieved through a cooperative approach that involved departmental managers, members and finance staff working together.

The contrasting figures for 2001/02 and 2003/04 show the success of this focus. A general fund deficit of £28m was transformed into a surplus of £19m. The long-term debt of £850m was reduced by £150m. The qualified accounts included seven s11 serious district audit public interest statements in 2001/02. There had been no s11 statement during 2002/03, and the council was confident that the accounts would have no qualifications.

Performance data and stakeholder perceptions provide evidence of the improvements achieved over the last two years. In addition to gaining the confidence of clients, the department has shed the culture of non-payment.

In January 2004, a government monitoring board noted: ‘Lambeth’s finances and financial management are beginning to turn around from a high-risk area to a source of strength.’

The council’s vision for 2008 is clearly stated in the recovery plan: ‘Lambeth council will deliver reliable, efficient and cost effective quality public services and provide value for money. It will listen to local people and work with them and its partner agencies to improve the quality of life for everyone living and working in the borough.’

The finance department identified a number of critical issues requiring urgent action to secure the essential organisational and cultural changes necessary to deliver all the elements of the recovery plan.

Committed leadership and team development were perceived as key drivers for change. This led to the appointment of a new executive director of finance from March 2003 and the subsequent recruitment of motivated and committed permanent assistant directors of finance.

Cultural change and partnership working in a complex business environment was a challenge. Targets were set, including the creation of a dedicated finance training curriculum provided; improved communications; and the creation of clear and honest dialogue in respect of exposing and correcting failure.

The finance department at Lambeth has also been working with PricewaterhouseCoopers. PwC provides a substantial part of the borough’s internal audit service. The partnership remit was extended in 2001 to cover specialised forensic investigations and fraud prevention services. This service has been commended with the maximum score in the government’s performance assessment.

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