HMT Finance Transformation Programme

fivesenegaleseManagement

Nov 10, 2013 (3 years and 11 months ago)

149 views

www.cipfa.org


HMT Finance
Transformation Programme

Manj Kalar

CIPFA

25
September 2013

1

www.cipfa.org

Agenda


Landscape


Finance Transformation Programme


Link to Civil Service Reform


CIPFA Thinks …


What CIPFA is already doing


What we plan to do?




cipfa.org.uk

www.cipfa.org

Landscape

cipfa.org.uk

www.cipfa.org

Landscape

4

cipfa.org.uk

www.cipfa.org

Remember the 2010 deficit reduction plan?

5

cipfa.org.uk

www.cipfa.org


Autumn Statement 2012
-

deficit reduction
plan

6

cipfa.org.uk

www.cipfa.org

Landscape (2)

7

cipfa.org.uk

Managing Taxpayers Money Wisely

Identifies four areas of development
where the public sector can improve
financial management:



Leadership
: driving performance from
the top



Cost conscious culture
: so every
decision is built on informed financial
assessment





Professionalism:
all public servants
have financial awareness



Expert central functions
: providing
the strategy to work toward common goals

8

cipfa.org.uk

What’s wrong?


Few disincentives for
poor performance


No structured
incentives to drive
savings


Lack of recourse


Unclear roles



Fragmented, multiple data sources



Inconsistent data granularity



Lack of data comparability



Budgetary protectionism





Lack of alignment across spending teams



No true, government wide chart of accounts



Multiple collection data points (eg. CO & HMT)



Role of Centre


Lack quality
information for
decision makers


Lack of finance and
non
-
finance staff
financial
management
capability


Inadequate
technology, lack
infrastructure for
basics

Transparency

Accountability

Simplicity

CULTURE

Coherence

9

cipfa.org.uk

Reason for the FTP

The

UK

is

facing

unprecedented

fiscal

pressures

and

strengthening

financial

discipline

is

an

essential

part

of

reducing

the

deficit

.

To

deliver

best

value

to

the

taxpayer

the

public

sector

has

to

develop

strategic

financial

management

and

embed

sustainable

cost

effectiveness

and

public

value

in

the

delivery

of

all

government

services
.

The

FTP

will

deliver

the

step

change

in

the

way

that

resources

are

managed

by

public

servants
.

cipfa.org.uk

Financial Management is key


“Good financial management is at the heart of
an effective, well run organisation…
understanding exactly how they are spending
the money and what return or policy outcomes
they are getting for that money”



Managing Taxpayers Money Wisely


FM at the
heart of finance transformation programme

UNCLASSIFIED

Ministers, Boards and
SCS demand the
highest standards of
financial management.


EFFECTIVE
LEADERSHIP

PEOPLE


All staff understand
they are responsible
for cost
-
effective
delivery


and are
appropriately trained
and incentivised.


COST CONSCIOUS
CULTURE


Finance professionals
have the range of
skills and experience
needed to support the
business.


PROFESSIONALISM


The centre aligns with
finance departments
to provide consistent
and coherent
messaging.


EXPERT CENTRAL
FUNCTIONS


Finance is an integral
part of strategy and
business planning.


PROCESS


Processes promote a
VFM and continuous
improvement culture.



Finance processes are
economic, efficient
and effective.



Central processes
support and
incentivise good
financial
management.



Senior management
has expertise to use
and analyse
information
effectively.


INFORMATION
and
TECHNOLOGY


Systems provide
relevant and timely
information that staff
need to exercise their
responsibilities.



Systems provide
access to clear,
consistent and well
understood
information.



The centre draws on
information that is
used by and useful to
departments.



The FD is a key
member of the senior
leadership team,
positioned to
influence all material
business decisions.


STRUCTURES


Departments’ internal
structures and
governance support /
incentivise a cost
-
conscious and risk
-
aware culture.



The finance
department is
structured and
resourced to provide
the business with the
support it needs.



There is clarity
between the
respective roles and
responsibilities of the
centre and
departments.


Vision for the Finance Transformation Programme

finance at the centre of decision making

FTP


Finance DG
-
led areas

Working with the Centre:


Working collectively:

UNCLASSIFIED

Finance and Commercial Awareness for non
-
Finance Staff

MOJ

Capability

(Finance Professionals)

DWP

HMT
Spending framework

HO

Value for money and efficiency

including ERG relationship

DfT

Shared services

BIS

Financial reporting
and management information

DCLG

13

Measuring FM Improvement

HMRC

cipfa.org.uk

FLG led FTP work streams


Finance and commercial skills for non
-
finance professionals

Ann Beasley


MOJ

Capability

(Finance Professionals)
Simon Judge
-

DfE

Value for money
-



HMT spending controls and ERG efficiency controls



Clare
Moriatry

DfT

Shared services

Howard Orme
-

BIS

Management Information and Financial Reporting

Sue Higgins
-

DCLG

Measuring progress of FTP

Simon Bowles
-

HMRC

14

cipfa.org.uk

Government Finance Profession


Of 22,100 FTEs in the finance community
-

there
are c.9,000 Finance Professionals:

• Nearly 4,000 trainees and over 4,800 qualified

• Over 20 % work in areas outside of mainstream finance.


Of the nearly 4,000 qualified finance professionals in
mainstream finance:


60% work in Decision Support;


Over 30% work in Reporting and Control ;


Less than 10% work in Transaction Processing.


Over 10% of qualified finance professionals are in
SCS or equivalent type roles.


www.cipfa.org

Departmental FM:
Strengths include:



Strong leadership
with qualified FD cadre and NEDs on boards &
established Finance Leadership Group


Good talent pipeline
(Finance Fast Stream Option and Financial
Management Development Scheme for graduate recruitment scheme)


Good
up
-
skilling programmes
for SCS e.g. Senior leaders analytical
capability up skilling project (initiatives are widespread but not
consistent)


Rigorous application of
spending controls



Continuous
review of finance processes
to drive out efficiencies,
remove manual interventions


Greater provision of
advice and insight
(e.g. VFM advice, more timely
and robust information) to board level discussions


Provision of business partner /
expert support


16

www.cipfa.org

NAO
report
-

Improvements
in
Government FM


Greater
recognition

of the strategic importance of the
finance profession


Finance
Leadership Group has established the Finance
Transformation Programme
to
position
finance

at
the
centre
of decision
-
making


Qualified
finance professionals are better represented at
senior levels in Whitehall


Improvements

in key financial processes, such as the Clear
Line of Sight and WGA initiatives


Government
taking positive steps with the aim of
improving management information
.


www.cipfa.org

Departmental FM:
Areas for further
investigation include:



Better understanding of
cost drivers
and financial implications of
operational/policy decisions


Improving
forecasting

capability to deliver increased accuracy and
better FM


Development of model cost effective finance function (more
cross
govt

standardising

and
streamlining

of services / shared services)


Opportunities for
further joining up
on capability building and sharing
expertise (reduce duplication of effort);


Better cross
-
government
succession planning
at senior levels


More in
-
year and regular
consolidation

of Accounts (
Dept

& ALBs)


More
sharing of good practice
e.g. Business partnering
experiences/models


18

www.cipfa.org

NAO report
-

Scale of FM challenges


Redesigning

and
transforming public services
so
they operate
sustainably

in context of
further
spending
reductions
and demand increases.


Treasury to
provide more
effective central
leadership
, to support public bodies in providing
services at
permanently lower cost
.


Chances
of success much greater if
financial
managers are central to decision
-
making
.


Integrate FM
fully
within
processes

to design and
implement effective target operating models


Financial impacts of all options should be
key
factor
in decision
-
making by finance and non
-
finance
professionals alike.


cipfa.org.uk

Measuring success of the Finance
Transformation Programme

20

UNCLASSIFIED

Use of the CIPFA financial management model to provide a
comparative and independent assessment of all Government
departments’ financial management


Financial
Management Styles
Leadership
People
Processes
Stakeholders
Supporting
Stewardship
Supporting
performance
Enabling
Transformation
Management Dimensions
cipfa.org.uk

cipfa.org.uk

cipfa.org.uk

Power of the FM Model


Enhanced V3 changes for operating environment



Improved functionality



FM
Strategy/Audit/Financial Reporting/Stakeholder confidence



Recent application at Department of Health, Environment Agency
and Skills Funding Agency




cipfa.org.uk

Finance Transformation Programme



How does this link with the broader
Civil Service Reform Agenda?

cipfa.org.uk

www.cipfa.org

Civil Service Reform


18 Action points


Size & Shape


Policy Development


Policy Implementation &
Accountability


Capability


Employment “offer”




25

FTP and Civil Service Reform

Civil Service Reform Plan published June 2012


18 Actions.

FTP was one of these CSR Actions
-


www.civilservice.gov.uk/reform


26

UNCLASSIFIED

Error! Unknown document property name.

CSR

Actions

FTP

Workstreams

Developing and managing future leadership (Action
13)

A 5 year capabilities plan identifying skills gaps and
how they will be filled (Action 12)

Finance
profession talent management


Commercial and finance skills for non
-
finance professionals

A robust cross
-
government MI system (Action 9)

MI and Financial Reporting

Create five centres for transactional services (Action
3)

Shared Services

New
departmental improvement plans assessed
annually (Action 16)

Measuring FM Improvement


cipfa.org.uk

www.cipfa.org

Civil Service Capability


4 key development areas:


Leading & managing
change


Commercial skills and
behaviours


Delivering successful
projects and programmes


Redesigning services and
delivering them digitally


27

Civil Service Capability

28

cipfa.org.uk

Civil Service Reform year 1


Civil
Achievements…


Actions for FTP, as before, completed


Updating
Osmotherly

rules

and
Managing Public Money


Stronger Cross Whitehall leadership of key corporate
functions


Move to
fixed term tenure

for Permanent Secretaries


Extended Ministerial Offices


Improving delivery of infrastructure and other
major projects
,
responding to recommendations by Lords Browne


and
Deighton


cipfa.org.uk

Civil service Reform year 2


Focus on
7 Game Changer Actions



Digital (by default)


Functional Leadership


Open Policy making


Modern workplaces


Major Projects


Capabilities Plan



Civil service 2020


And seeing residual actions through to completion



cipfa.org.uk

Finance and commercial skills for non
finance staff



Finance Skills for All re
-
launch


SCS Financial Leadership face
-
to
-
face course


Budget management face
-
to
-
face course


Toolkits/Intranet quick guides/best practice to supplement CSL
learning.


Engagement with the Commercial/ procurement profession


Peer review measurement process
-

testing of peer review
process and link with CIPFA/NAO model review


Mentoring scheme for business staff by finance professionals


Review of performance appraisal and recruitment processes to
ensure finance skills and performance are measured effectively


cipfa.org.uk

Professionalism focus 2013
-
14



Douglas
-
White Review
of Finance overseen by Lord Sainsbury


Set the ambition for the finance professionalism/ capability


Succession planning
-

Management of SCS cadre as a community


Talent management programme for G6 and G7


Qualified recruitment campaign


Creation of network community seminar talks


Secondments and swaps with departments and the private sector


Development of Finance foundation e
-
learning product


Launch of the finance learning map and career mapping tool


Structured development


GFP training event 6
-
7 November in
Brighton


32

UNCLASSIFIED

www.cipfa.org

How HMT can within existing budgets and preserving
single point accountability to Parliament for financial
stewardship that the accounting officer provides



Improve quality and consistency of management
information flows between Treasury and departments
to ensure these are of the right quality to enable
effective risk
-
management and decision making across
Government


Strengthen the role of the Head of the Government
Finance Profession in promoting and assuring improved
financial capability


skills, systems and processes


across government (considering also the interaction of
this role with the Treasury)

HMT FM Review
-

1

www.cipfa.org

HMT FM Review
-

2

How HMT can within existing budgets and preserving single
point accountability to Parliament for financial stewardship
that the accounting officer provides



Ensure right levels of delegated authorities and
approvals are in place to ensure both tight spending
control and appropriate flexibility for those departments
with proven financial management capability


Create a more streamlined, coherent set of central
appraisal and approval process for projects and
programmes outside those delegations


34

www.cipfa.org

CIPFA Thinks … 1

Capital and revenue expenditure decisions must be taken in a coherent
and joined
-
up way that is proportionate to the level of financial and
other risks involved in both the short and longer terms by:


Being set in the context of short, medium and long term financial
and delivery risks


Considering capital and revenue impacts together


Replacing fixed delegation limits with ranges


Linking delegation levels with risk assessments


Drawing on FM model outputs and relevant internal and external
audit reports


HMT matching skills and experience to the risk and complexity of
departments


Requiring medium term expenditure frameworks from all major
departments

www.cipfa.org

The quality and consistency of management information flows
between departments and the Treasury needs to be improved
through:


Appropriations on the basis of output targets


Increased use of shared services


Widespread adoption of the Common Chart of Accounts


Mid
-
year closedowns and coordinated intra
-
government
balance agreement processes


Incentivising accurate expenditure and cash flow forecasting


Publishing FM Model assessments and agreed action plans

CIPFA Thinks …
2

www.cipfa.org

The role of the Head of the Government Finance Profession needs to be
strengthened through:


Being a full
-
time role based in HM Treasury


Having a dotted line professional leadership relationship with all DGs
Finance, including input to their appraisals based on the quality of
information and other interactions with HMT


Being directly involved in the development of the budgetary and
performance frameworks


Finance being recognised as fundamental to the management of
Government rather than just another profession


Ensuring the FM Model is run regularly in all main departments, and
having access to the results


Evaluating the FM Model results to develop best practice guidance and
training


Monitoring progress of FM Model implementation plans


Coordinating CPD training to ensure balance and that FM weak spots are
addressed

CIPFA Thinks … 3

cipfa.org.uk

www.cipfa.org

What’s CIPFA already doing?


Supporting finance professionals across government


Training/CPD


Conferences


Talent Programmes


Central Government Panel


CIPFA FM Reviews


Financial Management Panel


Support Treasury/FLG


review/consultation


Talent programme




cipfa.org.uk

www.cipfa.org

What we plan to do


Support HMT Review


Use our pan public sector expertise to support
Government bodies


lead innovation and using unique
position to bring sectors together


Be a champion for public service


Promote good PFM across all sectors


Start a debate about
the role of
the CFO and need for
protection of officials



Questions?

cipfa.org.uk

Thank you


Manj Kalar

Central Government & Financial Management
Technical Manager

CIPFA

September 2013