Public purse-strings 'not managed well enough'

Financial management not good enough, MPs say

Tuesday, 09, Sep 2008 12:00

The government is not doing enough to improve its management of public expenditure, MPs say.

Parliament's public accounts committee warns that, despite an increase in the number of qualified finance directors on departmental boards, too many of those not directly working in financial management lack awareness or basic skills.

Forecasts predict annual government expenditure will rise to £678 billion by 2010/11 from its current level of £558 billion.

"The sum central government spends each year on public services… would suggest that it attaches a great deal of importance to the financial management skills of its staff," committee chairman Edward Leigh said.

"The evidence indicates that it does not. The Treasury and Cabinet Office are putting their weight behind initiatives to improve this situation but, at present, government departments are still not giving enough priority to driving towards better standards in financial resource management.

"This is to the detriment of achieving efficiency and value for money in the provision of services."

Four out of every five government departments are not basing policy decisions on their financial implications, the report found, but the government insisted a "major transformation" for the better had taken place.

A Treasury spokesperson said the number of qualified finance directors had increased dramatically "within a very short period of time" and that a "remarkable turnaround in professionalism" had been achieved as a result.

"Currently, over 90 per cent of departments have a qualified finance director," the spokesperson added.

"Finance directors are also making good progress in building financial management capability in their teams by passing their expertise down through management and organisational structures.

"Financial management has been rolled out service-wide and learning and development provision is in place to support those who are seeking to develop these skills."