The Financial Management Review (FMR), launched at Spending Round 2013, was led by Sharon White, second Permanent Secretary to the Treasury, and Richard Douglas, head of the Government Finance Profession, with Lord Sainsbury the expert external adviser.
The FMR has identified that significant progress has been made in strengthening financial management in government, and proposes ways of building on this and making further improvements. The reports key recommendation, to combine the existing role of Head of the Government Finance Profession with that of the Treasurys Director General Public Spending, has been accepted by the government. This powerful new role, reporting directly to Sharon White, will also have a formal management relationship with all the heads of finance across departments. These changes will strengthen financial leadership across government and the new post will also be able to drive reforms to financial management. The new role will be recruited for in the New Year, using a full and transparent process open to candidates from both the public and private sector.
The government has also accepted the reviews other recommendations:
- the Treasury will lead work, collaborating with departments and the Cabinet Office, to improve the consistency and quality of management accounting practices and reporting across government
- the Treasury will develop and apply a framework within which departments can take greater responsibility for some areas of expenditure that are currently controlled by the centre
- the Treasury will lead, with Cabinet Office support, a project to better align existing systems and processes around public expenditure
The Chief Secretary to the Treasury, Danny Alexander, said:
Constraints on public expenditure will be necessary for years to come as work continues to tackle the deficit and bring the public finances under control. Within this context, it is more important than ever that taxpayers money is spent efficiently and effectively and that we maximise the value secured for every pound we spend. Strong financial management across central government has been, and will continue to be, critical to achieving this.
I am confident that the recommendations contained within this review will deliver the necessary improvement in spending control and financial capability.
Lord Sainsbury said:
The Treasury team who have produced this report have done an excellent job, and the challenge for the government is now to recruit a high-level person who is capable of delivering the proposed reforms.
The review examined a range of financial management models from across the public and private sectors, both in the UK and overseas. An array of finance leaders and experts from across government, the private sector and key institutes and think tanks were consulted over the course of the review.