FINANCIAL MANAGERS in government face a “stark challenge” in helping bring about reform while implementing cost reduction programmes, an audit watchdog has warned.
The National Audit Office’s report into financial management in government found that progress has been made in embedding more financial robustness in Whitehall. But the continued cost-savings programmes in central government, married with service reform, means further improvements are required.
“Government is a long way from ensuring that decision-making is routinely based on robust information,” said the NAO in a statement.
While the Finance Transformation Programme, set up to enhance finance professionals’ skillsets and to embed more qualified professionals into government is working, more is required.
The NAO has also called on the Finance Leadership Group, formed with the ten FDs of the largest departments, to take responsibility for diagnosing the key financial management challenges.
“Savings are being made but progress in restructuring how services are being delivered is lagging,” said NAO head Amyas Morse.
If the challenge of reforming the delivery of public services is to be met, then the Treasury and Finance Leadership Group need to provide more effective impetus to strengthen financial management capability across government.”
Among the recommendations to the group are: to ensure that a “sound financial understanding” is at the heart of target operating models for public services; actively seek opportunities for service transformation and coordinate both front-line and back-office services, to reduce spending in the long term; and educate the wider civil service about the financial impact of their decisions and actions.
Department are still failing to integrate financial management with strategic and operational planning, the absence of which prevents the best outcomes and results.
Rather than just controlling spending, more sustainable reforms are required to lower the cost of government.
“A finance team should be a strategic partner in any organisation, helping the organisation to meet its objectives more effectively. Given the scale of the challenge, and the immediacy of the required response, financial management should be a key input in developing target operating models,” stated the report.
Government spending cuts are planned at 15.4% between 2009/10 and 2015/16.
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