HELPING defeat British fascism and restore some of the badly damaged reputation of the UK Border Agency – albeit not at the same time – is not a bad career epitaph. Especially for a professional calling that is far from over.
Yet that’s exactly what Rob Whiteman has achieved – and with some panache – even before his latest reincarnation as chief executive of CIPFA.
Since picking up the reins just over two years ago from Steve Freer, Whiteman has wasted no time in stamping his mark on the organisation that has been championing public sector finance professionals since 1885 – at least when CIPFA began life as the Corporate Treasurers’ and Accountants’ Institute before morphing into the Institute of Municipal Treasurers and Accountants in 1901 and in its current guise in 1973 when it obtained its Royal Charter.
Fast forward to the present and in just two short years, Whiteman has made a number of big changes at the organisation.
Off the Strand
Perhaps the most seismic departure has been the move away from the architetcural gem that was its Robert Adam-designed Regency office off the Strand, which had been its well-appointed home for many years, to an ultra-modern building in Whitechapel, East London.
Despite the undoubted romance and charm of the period pile – home to JM Barrie when he penned children’s classic Peter Pan, the move was made for astute financial and strategic reasons, as Whiteman readily attests.
“Essentially we had a stronger balance sheet than a revenue position and as our core market is the public sector which has been cut, we could see the opportunities to grow, but needed to liberate some of our balance sheet value to do that. So I flogged it because as I said to CIPFA council, let’s not be too sentimental, we are accountants.”
“We bought this building freehold – and we deliberately bought it on the Eastern edge of the city because in 30 years time this is an area where the real estate will be just as valuable as the area we moved away from.”
Ever the shrewd operator, Whiteman bought a building with a bigger footprint than needed in order to reap the benefits of gaining a fresh revenue stream from rental income – namely a five year tenancy from the London Air Ambulance, who base their HQ over two floors.
Now with 85% of it income derived from its business operations – an unusual scenario for an accountancy body – which would typically get 90% of its revenue from member dues and 10% from commercial income. And with turnover now at £25m – up £1m for the second year running and growing student numbers – up 25% also for the second year on the trot, life is decidedly sweet on Planet CIPFA.
The good years began to roll after the funds released by the move enabled the institute to make a number of “shrewd investments in new products and services”.
And the open plan office “enabled us to get our commercial, policy and membership people to work in a much more joined up way to produce new products and services, work in a smarter way and book hot-desks on touchscreens”.
“That’s not how we used to work” says Whiteman. “We were a little rabbit warren office where you could get lost and spend ten years in there – and no one would know.”
CIPFA’s top three income generators are now gleaned from its information services business, CIPFA Property and its 30 ‘networks’ – which includes CPD training and updates on what’s going on in the worlds of pensions, treasury management and housing, and much else in-between.
Protecting the future pipeline of members partly means recruiting more students. While UK student numbers are fairly static, most new recruits are derived from those in central government and health. Local government numbers have fallen in line with decimation of the central government grant, beaten down 40% in the past five years alone.
But overseas student recruitment is a much happier story, with numbers up 25% for the second year running.
Despite the somewhat bleaker home picture, Whiteman, ever the optimist said that given the public sector is 38% of British GDP, “a lot of young people are attracted to a career in public sector finance because they want more than a good career”.
“They want a sense of adding value to society. People want a sense of what management textbooks call self-actualisation. The truth is that if you’re an accountant working in the public sector you can see a hospital or a leisure centre and say ‘I helped build that because of my advice’.
“We have a strong sense of people’s value and that’s vitally important to maintain the quality of people’s lives. Whatever Mrs Thatcher or subsequent governments have done, they haven’t taken away the enormous sense of pride people that people have in public service”.
‘An enormous waste of public money’
Whiteman also poured scorn on private finance initiatives (PFI’s). A recent report in the Independent on Sunday found that the UK owes more than £222bn to banks and businesses as a result of some 720 PFIs.
A prime example is Barts Health NHS Trust in London, recently placed in special measures. Now £93m in debt and stressed under the weight of its 43-year PFI contract where it will compelled to pay back over £7bn on contracts valued at just £1.1bn.
“PFI was an invention to say the borrowing to fund these assets won’t be on the state balance sheets,” says Whiteman.
“So in a way it was a legal way to avoid proper accounting. But of course, decades ago, when we wanted to meet the ERM convergence criteria and wanted public sector debt to remain a low proportion of GDP, the government took out all these PFI deals – in order to stop public sector debt rising above 41-42% of GDP. It’s now 80% because we bought out the banks. The whole PFI invention was a waste of time and in retrospect it was an enormous waste of public money.”
Astutely political, Whiteman says the UK is moving to a smaller state, somewhere along the lines of the US or South Korea at around 35-36% of GDP rather than its typical place hovering around the low ‘40’s.
Should Britain reach that destination it will be one of the smallest states in the developed world. And with existing triple lock on pensions, “probably” not affordable in the long term as many retirees are living above the median income level, says Whiteman. This will mean more means-testing.
“This is real politics. We are cutting benefits to working age families while we are protecting pensions. Very often working age families working to pay taxes to pay the pensions to people who are better off than they are.
“What CIPFA will always do as the voice of the public sector profession to the government is ask if they are you making the right choices and priorities because if you get this right you can move towards a smaller state while still delivering the services needed by the most vulnerable in society. But politics can get in the way of that and we think the finance profession has to be strong, loud and articulate in pointing out the potential weaknesses of any government’s policy – we are politically neutral.”
And in health, Whiteman says CIPFA has a critical role to play around integration as government cuts in the last five years mean social care is now provided to 480,000 fewer people – “probably one of factors for increased attendance at A&E and the budget pressures we see in NHS”.
As a pan-public sector body, CIPFA, says Whiteman, “brings FDs together and work out how best to pool the budget to support integration”.
“One of the exciting things about devolution – called Devo Manc – is the ability of Manchester to pool budgets across health, local government, and housing to build a stronger economy to make sure people have the right skills for the economy to flourish and we at CIPFA playing a proud role in ensuring the finances can help make it happen.”
Opposing the BNP
A key Whiteman role pre-CIPFA, was running the Border Agency and its £2bn budget and 30,000 staff, where he replaced Lin Homer, the outgoing and oft-crictised head of HMRC who MPs once lambasted for a “catastrophic leadership failure” when heading the Border Agency.
“People said I did a good job there and helped stabilise it. It’s in less of a mire now. It’s viewed as having been on an improvement journey and I’m very proud of what I did there.”
Whiteman and Homer have other similarities – he as a local authority accountant and chief executive at Barking and Dagenham local authority and Homer, a lawyer, as chief exec of Birmingham.
He describes his time there as “an amazing experience” because “it stretched me in a way I’ve never been stretched before and will probably never be stretched again”.
“In my time there the BNP had so many seats on the council that for the first time in British political history they were the official opposition. I went there with a good track record as a leader who could improve an organisation and I found that I had to invent a whole new toolkit of how to be a community leader.
“What happened in Barking and Dagenham was a traditional white working class population that didn’t like the scale of demographic change taking place and so voted for the BNP because they thought the state was on the side of people moving in.
“Our job was to point out that the people moving in were good families with good kids, good people just like they are, and our job was to bring the community together and I feel really proud of what we did.
“My last act as chief exec was to be the returning officer that announced their BNP’s loss of every seat on the council. I’m really very proud of the way that the community and the council responded to this challenge. The truth is that they were elected and we treated people with respect and we did their case work and we also said unequivocally that we are a statutory agency charged with promoting positive race relations and we are going to do our job properly.
“I’d like to think that what people say about my time at Barking and Dagenham, is that the way that many areas of the country have to deal with the far right, people learnt a lot from how we dealt with it there, because we both respected democracy, but confronted the issues.”
Colin McClatchie joins Robert Black, Rhona Brankin and Dame Lin Homer as a public interest member on the ICAS council
Former chief executive of HMRC Dame Lin Homer has been appointed to the ICAS council as a public interest member
Dame Elish Angiolini appointed as chair of the ICAS Discipline Board, and Lord Wallace of Tankerness appointed to its Regulation Board
The AAT has become the first accountancy body to sign the Women in Finance Charter, which is designed to help achieve gender balance in the financial services industry