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Government departments 'need qualified finance directors'

20/02/2008

Several government departments including the Ministry of Defence do not have a professionally qualified finance director on their main board despite a Treasury requirement to do so, the National Audit Office (NAO) has revealed.

Six departments, accounting for over £45 billion (eight per cent) of total central government expenditure, have a finance director without finance qualifications, the NAO found.

The report is a follow-up to a 2003 review of financial management in central government.

In addition, only 40 per cent of departments invariably provide decision-makers with a full analysis of the financial implications of policy proposals; financial management matters are not automatically included in the performance assessment criteria of permanent secretaries and other senior civil servants; and not a single permanent secretary holds a professional finance qualification.

Tim Burr, head of the NAO, said: "Departments' financial management has improved since 2003.

"But, tighter financial settlements, the drive for efficiency savings and rising public expectations about the quality of public services mean that there should be no let-up in the government's efforts to extract maximum value from its use of taxpayers' money."

The report also found departments have not improved their record of forecasting how much money they need each year, particularly in relation to capital spending, such as money spent on building projects.

In at least four of the five years between 2002-03 and 2006-07, three departments under-spent their capital budgets by more than ten per cent compared with their final forecasts.

Over the same period, the aggregate total of under-spending on capital in excess of ten per cent was £4.9 billion across the whole of government.