ICAEW is calling for the government to create a new role of a group chief financial officer (CFO) for Whitehall in a bid to improve the handling of public sector finances.
In a policy briefing, A CFO at the Cabinet Table? the institute says that strong financial disciplines and a strong finance function should be a growing, important and integral part of the process for managing public finances and meeting key targets.
ICAEW chief executive Michael Izza said: 'At a time when public sector debt continues to increase (even if the deficit is narrowing), financial disciplines and financial leadership in government to create sound finances in the long term has never looked more necessary.'
The briefing identifies three key reforms. The first is the transformation of the Treasury into what it describes as 'a modern and more proactive finance ministry', so that it operates as a group finance function.
Secondly, the institute wants to see the creation of a group CFO role to take overall responsibility for financial disciplines across government. It claims that currently none of the top three senior civil servants hold a strategic responsibility for finance. The new CFO would provide 'authoritative, definitive and informed advice', the ICAEW says, and would be responsible for the network of departmental finance directors. It describes the ideal candidate as having 'significant global experience in finance, leadership and business, with the status to exercise financial leadership across government departments and influence the Cabinet's decisions.'
Finally, the ICAEW wants the government to empower finance directors in government departments so they are central to all policy and spending decisions.
ICAEW's briefing states: 'For this to work, the finance director role would need to be elevated to the role of secondaccounting officer level, working closely with the Permanent Secretaries (who would be the equivalent of a chief executive in a private company), and reporting to the Secretary of State'.
While welcoming reforms such as the introduction of Whole of Government Accounts (WGA) and the Office for Budget Responsibility, ICAEW says these do not go far enough.
Izza said: 'The government has changed key debt targets and we think that the information they have started to gather through things like WGA could be better used in policy decision-making. We think that a new public spending architecture could be the answer, and help transform our public finances into a more resilient and sustainable model.'
