The functions of finance are evolving. While control of money and budgets remains a core role, finance teams are increasingly taking on more strategic functions to support decision making and performance management. We are particularly interested in these evolving strategic functions as they relate most heavily to the concerns we raised about the supply and demand for management information in Improving Decision Making in Whitehall.
Comparing the activities of financial leadership in the private sector with Whitehall, it is clear that these strategic roles are often weaker at the very centre of government. In some areas, such as supporting performance management, these central leadership roles are relatively under-developed. These differences are reflected in the structure of financial leadership in Whitehall, which at a cross departmental level is more fragmented than that typically found in a private sector environment.
These weaknesses seem to be specific to the UK. Looking at some generally comparable centres of government in other countries, one striking feature is the relative weakness of the arrangements for performance management in the UK. It is also noticeable that the UK’s Treasury does not take a leading responsibility for supporting performance management. In contrast, all the other organisations responsible for expenditure control play active roles in their respective countries’ performance management systems.
It is also striking how weak the position of the leading finance professional in Whitehall is: a part-time post, acting as a first among equals with no formal input into key decision-making processes. In all other countries that we studied this is a senior, full-time post within a central organisation that is playing a clear role in the performance management system.
It seems clear that the UK needs to strengthen its performance management and financial leadership. Indeed, the UK has huge experience of running large, diversified organisations within its private sector. Drawing on this experience to strengthen the centre of government could be a truly world leading initiative. This should be considered in the summer as part of the Government’s review and refresh of its civil service reform programme.