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Change in financial management must be accelerated – NAO

The scale of the challenge for financial managers in Government is “stark”, the National Audit Office (NAO) has warned.

The financial consolidation programme is now expected to last longer than originally planned and further improvements will be needed to support delivery with reduced resources in the longer term.

The NAO welcomed signs of improvement and a greater presence of finance managers in the upper levels of Whitehall.

However, the report stated that departments do not integrate financial management with strategic and operational planning and highlighted that some savings are less sustainable than others.

NAO recommends that the Treasury ensures more effective leadership with the Government’s Finance Leadership Group taking responsibility for diagnosing and addressing key financial challenges.

Amyas Morse, head of the National Audit Office, said: “Finance teams in departments and other public bodies have a vital role to play if the Government is to deliver the planned public service reform. Finance managers are now being taken more seriously and playing a more central role in the efforts to provide sustainable services at lower cost.

“However, the pace of change must be accelerated. Savings are being made but progress in restructuring how services are being delivered is lagging. 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.”

Ian Carruthers, CIPFA’s director of policy, commented: “CIPFA is pleased that the National Audit Office has acknowledged the improvements in public financial management that have taken place over the last few years as a result of the development and increasing impact of the finance profession in central government.

“The report identifies a number of key issues ahead, and we believe that the widespread deployment of the CIPFA Financial Management Model will help focus work and track progress towards addressing these.”

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