Transcript Document

Improving Financial
Management
Nick Jackson
Head of Finance Professionalism
Monday 28th September 2009
Areas to cover
Why do Public Sector Boards needs to work
differently?
What are we doing to drive improvement in
financial management?
How can you help?
1. Why Boards need to be more
involved in financial management
Since the CSR, global developments have caused a
sharp deterioration in the UK’s fiscal position…
Public Sector Net Borrowing (PSNB)
14
Per cent of GDP
12
Budget 2009 figures excluding liabilities and
unrealised losses
on financial sector interventions
10
8
6
4
2
0
-2
-4
1997-98
2000-01
Budget 2008 forecast
2003-04
2006-07
PBR 2008 forecast
2009-10
Budget 2009 forecast
2012-13
Outturn
Reduction required in medium term spending
Current Spending (PSCE)
8%
Current spending will grow by 0.7%
each year between 2011-12 and 201314, with additional efficiency savings
allowing the Government to focus
resources on front line public service
priorities
7%
6%
real growth
5%
4%
3%
2%
1%
19
97
-9
19 8
98
-9
19 9
99
-0
20 0
00
-0
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01
-0
20 2
02
-0
20 3
03
-0
20 4
04
-0
20 5
05
-0
20 6
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-0
20 7
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-0
20 8
08
-0
20 9
09
-1
20 0
10
-1
20 1
11
-1
20 2
12
-1
20 3
13
-1
4
0%
-1%
Net Investment
4%
3%
2%
2%
1%
1%
0%
19
96
19 9 7
97
-9
19 8
98
-9
19 9
99
20 0 0
00
-0
20 1
01
20 0 2
02
-0
20 3
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-0
20 4
04
20 0 5
05
-0
20 6
06
-0
20 7
07
20 0 8
08
-0
20 9
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20 1 0
10
-1
20 1
11
-1
20 2
12
20 1 3
13
-1
4
% of GDP
3%
Public sector net investment will
move to 1¼% of GDP by 2013-14,
with proceeds from additional assets
and property sales available to
supplement capital budgets
Efficiency is more important than ever…
A record of delivery: Gershon £26.5bn and CSR £30bn
Gershon Over-delivered – £26.5bn against £21.5bn target
Departments already delivering strongly against CSR £30bn target (08/09 – 10/11)
An additional £5bn in 10/11
Given early findings of OEP & PVP, and additional capability developed within depts
Operational
Efficiency
Programme
Public Value
Programme
Ambitious VFM programme in next Spending Review Period
Informed by findings of both OEP and PVP
Meeting the challenging fiscal context requires…
•
•
•
improved control over public spending
greater value for money from spending, with real service
delivery improvements
better financial management, integrated effectively with
performance management
Strong financial management and governance
need now to take centre stage in policy making,
planning and delivery
2. What are we doing to improve financial
management and governance?
8 Priority outcomes for improving financial management
8. Establish
clear alignment
across PSG &
HM Treasury
7. Understand
and address
customer
expectations
6. Manage
stakeholders in
a consistent
and open way
1. Establish
visible
leadership
“Professionalising
and modernising
the finance
functions in
government”
5. Establish a
sense of a
community
2. Support a
change of
culture that
embraces
strong financial
management
and
governance
3. Establish and
maintain
standards and
quality
4. Promote
integration of
financial and
performance
management
Our four key building blocks to improve FM
1. Introduce a simple and coherent framework - Clear Line
of Sight (Alignment) project
2. Implement clear and consistent reporting – Whole of
Government Accounts and IFRS
3. Provide strong governance, accountability and
independent assurance – Corporate Governance Review and
Internal Audit Service Review
4. Develop financial management skills and capabilities
– commitments on professionalising Finance, setting the “tone from
the top” and extending skills into the wider civil service
Financial Management skills and capabilities
1.
Qualified Finance Directors - reporting direct to
Permanent Secretaries, at same level as other Board
members
2.
All departments to complete CIPFA FM Model
and VfM benchmarks
3.
Embed Financial Management skills across
central government
3. How can Non-executives help?
So what does this mean for Finance – how can you help?
Strategic Perspective
New Position
New Questions
Innovation
New Roles
Many thanks for your time
Potential supporting slides
Existing financial frameworks – the problem of misalignments
Estimates
What the proposed
changes would
mean…..
Budgets
0
86
0
35
7
58
Budgets
Estimates
71
0
-3.8
473
0
Resource Accounts
0
0
0
16
Resource Accounts
Amounts included under each framework (£bn) for 2008-09 plans
on COINS as at August 2008. Excludes devolved
administrations.
Amounts included under each framework (£bn) for departments’
2008-09 resource plans as at August 2008. Excludes devolved
administrations.
FM skills and capabilities – our aim and audience
Finance
Governanc
e Team
Finance
Professionals
c.9,000 people
Civil Service Finance
Community
c.23,000 people
Wider Civil Service Community
c.500,000 people
Expanding the reach of
FM awareness
Aim – To embed Financial
Management skills across central
government and facilitate
development of a community of
finance professionals that is
recognised for the value that they
bring to departments in realising
their business objectives
FM skills and capabilities – Our priorities
Top 200 and SCS training/ skills
development – setting the right “tone
from the top”;
• FM a Core Skill
• Master classes on Board
Effectiveness and Business
Management
Develop finance professionals –
qualifieds and trainees;
• Trainees and qualifieds from all
CCAB bodies
• Supported training & high quality
CPD events
• Developing first rate business skills
Improve skills and opportunities for
non-finance professionals working in
Finance:
• Opportunities to obtain Certificate
level qualifications (AAT and
Diplomas)
• Bespoke job specific training
• Opportunities to progress
Improve FM skills of those in nonfinance roles:
• Finance Skills for All
• Meeting the needs of those in specific
roles (e g budget managers)
• Meeting the FM needs of those in
more general roles (e.g. policy
developers and operational managers)