Departments 'lack finance skills'

The report says more decisions need to be based on financial assessments

Government departments controlling more than £550bn of public money do not have enough staff with good finance skills, a committee of MPs has said.

Financial directors have increased but there is a "general lack" of skills among other staff, they said.

Only 20% of departments based policy decisions on a "thorough" financial assessment, they added in a report.

The government said it had a lot more finance chiefs and progress was being made in passing on their expertise.

The Commons Public Accounts Committee said since its last report in 2004, the number of finance chiefs had increased, but among other senior non-finance staff, skills were lacking.

'Weak'

This had proved a "barrier to improving their financial management" and as a result only 20% of departments based policy decisions on a "thorough assessment of their financial implications".

Only 41% included a full financial appraisal in every policy proposal, the committee said.

Few departmental boards are presented with accurate, timely and integrated financial and operational performance information Public Accounts Committee report

Meanwhile 19% of departments, between them handling assets worth £23bn, admitted being "weak" at managing their balance sheets.

Committee chairman Edward Leigh said: "The sum central government spends each year on public services - over £550 billion at present - would suggest that it attaches a great deal of importance to the financial management skills of its staff. The evidence indicates that it does not."

While the committee recognised efforts by the Treasury and Cabinet Office to improve the situation, they said government departments were still not giving "enough priority to driving towards better standards in financial resource management."

'Major transformation'

The committee blamed poor financial management for a £1.8bn underspend between 2002 and 2007.

Members suggested it might mean departments were holding too much money in contingency funds, rather than directing unspent money to priority programmes.

"Departments are continuing to spend less money than they forecast, particularly on capital projects, thereby increasing the risk that resources are not being allocated across government in the most effective way," the report said.

"Few departmental boards are presented with accurate, timely and integrated financial and operational performance information to enable them to take sufficiently informed decisions on the use of resources and to review how well they are utilised."

A spokesman for the Treasury said that more than 90% of departments now had a qualified finance director.

"There has been a major transformation in qualified finance directors within a very short period of time, demonstrating a remarkable turnaround in professionalism," he said.

He added that "good progress" was being made in improving finance management within teams "by passing their expertise down through management and organisational structures". He added training was in place for those who wanted to develop their skills further.