The chancellor and chief secretary to the Treasury have commissioned a review into ways to strengthen financial management in central government which is due to report before the end of the year.

The move follows a critical report on financial leadership in Whitehall from the National Audit Office, and is designed to encourage a 'cultural shift' in the government's approach to managing public spending.

In his introduction to the document outlining the background to the review, Strengthening financial management capability in government Danny Alexander, chief secretary to the Treasury writes that the aim is to ' modernise our approach and sharpen our game in government, learning from the operation of the best strategic central finance functions in the corporate world'.

Richard Douglas, head of the government finance profession, and Sharon White, director general for public spending at the Treasury, will jointly lead the review for which Lord Sainsbury will act as external advisor.

The review is tasked with examining how the Treasury can improve performance in several areas, including the quality and consistency of management information flows to departments; the role of the head of the government finance profession in promoting and assuring improved financial capability; achieving appropriate levels of delegated authorities and approvals; and creating a more streamlined, coherent set of central appraisal and approval processes for projects and programmes.

Alexander said: 'We need to complement, rather than replace, the long-established accounting officer regime, where Parliament can call official heads of departments to account for the stewardship of resources under their control.'