SPRING 2013 NUMBER 111
The magazine for Government Finance Professionals
In safe hands Kirstin Baker on the challenges facing HM Treasury
D EA ME 1 HOUR
CIMA calls for appointment of more finance experts p22
Women in the profession: two different paths to success p18
One year on: Richard Douglas’ FTP update p9
CIPFA/HMT’s World Class Symposium: full report in this issue
Global designation Global opportunities CIMA, the Chartered Institute of Management Accountants, is the worldâ€™s largest professional body of management accountants, with 203,000 members and students in 173 countries. When you become a CIMA member you will also be a Chartered Global Management Accountant (CGMA). CGMA is the global designation for management accountants.
A CGMA designation tells the world youâ€™re a trusted, expert strategist connecting all aspects of business. Backed by a powerful array of benefits, you can stay connected to the pulse of your profession, become a knowledge leader and join the conversation. CIMA is the most relevant qualification for business, in both the public and private sectors, developing financially qualified leaders, who are pioneers in business. To find out more about CIMA visit:
Connect with CIMA on www.facebook.com/cimauk
BRITAIN IN BLOOMBERG Welcome to your Spring Gasette. This edition is always synchronised to cover the CIPFA/ HM Treasury World Class Performance Symposium. Hosted once again by Bloomberg at their fabulous City offices, it featured the array of star speakers, which has now come to be expected of the event. Read the reports on pages 8–9, or if you couldn't attend this year why not watch the recording on the CIPFA website (see www.cipfa.org). Also in this edition we interview HM Treasury's new Finance Director Kirstin Baker and find out what our two secondees at M&S have been doing. There's also a report on the GFP Award 2012 winners and the GFP Business Fair recently hosted by DFID in East Kilbride – our first one in Scotland. After 25 editions as Editor of Gasette, it certainly looks like this will be my last one. It really has been a great pleasure to work with
the production team (Graham, Adam, Polly and Tim) at Armstrong Media/PQ magazine, as well as all the contributors over the years. However, our biggest thanks go to all the advertisers who ensure that our magazine goes from strength to strength without any taxpayer funding. Before I finally sign off, I've always been impressed by the commitment and professionalism of individual members of the GFP community. You've come in your hundreds to support our conferences and events and it's your enthusiasm that has made my job pleasurable and all worthwhile. Enough from me. Watch out for your next Gasette interview with Phillip Hammond and Jon Thompson. Very best wishes, Terry Rogers, Editor
Simply world class – pages 8 & 9
CIPFA/HMT World Class Symposium
for a school visit – and found the experience a very rewarding and enjoyable one
Hot news from the GFP
Accountancy news What’s happening with your body? Find out here!
Our reporters cover the major stories from the recent conference
Values Verus Violence
Kirstin Baker interview
Security Cyber crime is a growth business, so just how safe is your network? Mark Wilson volunteered
CFOs have a part to play in improving the efficiency of government finance
GFP Awards 2012
Women in finance #1
Women in finance #2 How two women achieved success in their career by treading very different paths
Gasette quiz special
Meet the winners – and this year it could be your turn! A revealing international survey from Ernst & Young paints an interesting picture
Recruit more finance experts, says CIMA
Working at Marks & Spencer – an update Top tips for trainees on how to best prepare for those allimportant exams How you can develop this valuable characteristic Test your brain power, plus our prize picture anagram
ABOUT GASETTE ISSUE # 111 Send your comments to Gasette Editor, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ. Telephone: 020 7270 5874 (GTN: 270 5874). Email: TheGFP@hmtreasury.gsi.gov.uk VIEWS EXPRESSED IN GASETTE ARE NOT NECESSARILY THE OFFICIAL VIEWS OF THE GOVERNMENT FINANCE PROFESSION OR HM TREASURY Editorial services provided by PQ Magazine. Production by Armstrong Media Printed by Holbrooks Printers, Portsmouth © HM Treasury 2013 spring 2013
strong MEDIA theGASETTE 03
DFID hosts the GFP in Scotland THE DEPARTMENT for International Development (DFID) was delighted to host the GFP for its inaugural Scottish Business Fair on 16 and 17 January 2013. The event was well attended with delegates from DFID’s professional and trainee finance teams and many other government departments including the Scottish Government, Transport Scotland, the Ministry of Justice and HMRC. DFID chose the theme of ‘Finance at the centre of decision making’, and the programme agenda was developed with the help of HM Treasury, who sourced professional speakers from PwC, Deloitte, HM Treasury, Hays and Kaplan, together with the leading accountancy institutes. The speakers explored a wide
The MoD’s George Henes with the Finance team’s coveted ‘PQ’
Double win range of topics. These included the capabilities and skills that will be required of government finance professionals in the future, tools to measure and benchmark financial management maturity, and how finance functions can move towards being effective strategic business partners. With sessions on
leadership and mentoring, current trends around fraud and corruption, and a technical IFRS update, the programme was given the thumbs-up by attendees. Attendees at this free event also collected CPD points, and enjoyed what was an invaluable networking opportunity.
Public sector reporting top of G20 agenda The International Public Sector Accounting Standards Board has welcomed the G20 Finance Ministers’ and Central Bank Governors’ decision to address ‘transparency and comparability of public sector reporting’. The IMF and World Bank have been called on to explore the issue and provide appropriate updates, declaring that “strengthening the public sector
New GFP appointment We welcome Gillian Crooks, whom Richard Douglas has appointed to help develop the GFP. Gillian’s role is Senior HR Business Partner for the Government Finance Profession. Gillian (pictured) is on secondment from HMRC where, prior to work on business and
balance sheet is needed to better assess risks to public debt sustainability”. The IPSASB has been setting standards for financial reporting of governments since 2011. Currently, it has published a complete suite of 32 standards for the accrual basis of accounting, as well as one cash basis standard for countries preparing to move to accruals.
culture change, she was previously the Deputy Director responsible for developing and delivering the Tax Professionalism programme for HMRC, starting at the merger of Customs and the Revenue and culminating in the launch of the Tax Academy. Over the next 12 months Gillian will be ensuring that our HR
practice covering the FTP areas is exemplary and fully aligned with Civil Service Reform ambitions. Gillian’s early priorities include reviewing the ambition for the profession, SCS talent management and succession planning. Gillian is meeting with a range of internal and external stakeholders both to build her knowledge of the profession and the wider context.
THE OFFICE OF THE GFP PRESENTS... THE TRAINING EVENT: BRIGHTON METROPOLE 6th & 7th NOVEMBER For more details go to www.thegfp-treasury.org 04 theGASETTE
THE MoD’S CORPORATE Finance & Military Capability Team has won the double. We know it walked off with the Finance Team of the Year title at the GFP awards last year. But what you probably didn’t know was that early this year it beat the likes of Innocent and PwC’s ACCA team to win the PQ magazine Accountancy Team of the Year award. Keep an eye on the official website for categories and rules for entry to the 2013 GFP awards. All we need is 250 words explaining why your ‘nominee’ should be one of our winners – you can meet all of last year’s victors on page 16. To find out how to enter see www.thegfp-treasury.org.
A day in the life of Katie Tillyer...
“AS A YEAR 11 student with many important decisions ahead of me, I was very excited to spend a day with the GFP. I learnt a lot about the Treasury and other departments by attending a meeting and speaking to staff. I found that working for the government provides many more options than I’d anticipated and that department mobility means work can be tailored towards your interests. I really enjoyed my day and would definitely consider pursuing a career in the civil service.” spring 2013
Leaders In CenTraL GovernmenT FInanCe reCruITInG experTIse Weâ€™re the UKâ€™s largest suppliers of staff to the public sector, and leaders in central government finance. With strong relationships across government departments, agencies and non departmental bodies and a team of 300 specialist public sector consultants we are experts at matching the right person with the right job. Our deep understanding of government finance means people trust us with their careers and departments trust us to find the right talent. For more information in how we can help you, contact Kyle Tombleson on 020 7259 8747 or email email@example.com
Innovative leadership calls for the diverse perspectives of both women and men. And not just in the boardroom. Despite constituting a significant part of the overall public sector workforce, women remain woefully under-represented at the top table. In only four countries across the G20 do women occupy even a third of the public sector leadership roles. Our Worldwide Index of Women as Public Sector Leaders highlights issues of gender equity at senior leadership levels in the public sector. Most governments are aware of the benefits of promoting a more balanced gender mix in their leadership ranks and are actively advancing policies to address the gender deficit. But, as our Index shows, there are still many challenges to be addressed. We welcome a global conversation about the policies, measures and role models that are needed to promote and retain the female talent that abounds in the public sector.
Women Public Sector Leaders
ÂŠ 2013 EYGM Limited. All Rights Reserved. EYG no. FK0027
UK 35% France 21.4%
Saudi Arabia 0%
Japan 2.5% S.Korea 8.6%
Mexico 14% % Women Public Sector Leaders
Australia 37% S.Africa 33.8%
To find out more, including information on our Worldwide Women Public Sector Leaders Network, visit ey.com/government/womenleaders.
PQ OF THE YEAR WINNER
RECORD YEAR FOR RECRUITMENT
NOT BEAN-COUNTING NERDS!
Liina Pukk, an AAT Level 4 student from Surrey, has claimed the coveted PQ of the Year Award 2013. Pukk, pictured, scooped the prize at the annual PQ magazine awards evening held in London on Monday 4 February. Profoundly deaf and communicating through sign language, she studied AAT at Kingston College in London. Pukk is extremely deserving of this award having overcome physical obstacles to pursue a career in finance. Every year PQ magazine recognises those within the accountancy and finance sector who have gone above and beyond or who have achieved remarkable feats. The awards cover a range of categories including distance learner, accountancy college and accountancy team of the year.
CIMA has announced record growth figures for 2012 as the institute’s global footprint continues to expand. More than 29,000 new students joined CIMA last year, taking the total population of students and members to over 200,000. CIMA enjoyed massive growth in new and emerging markets. A record number of new students in Poland and Russia chose CIMA, while Bangladesh and Ukraine saw an increase of 303% and 235% respectively. Nigeria’s new student numbers almost doubled in 2012. The institute’s core markets also grew significantly with record numbers of new students and members in the UK and Sri Lanka, and record numbers of students signing up in South Africa and Malaysia. CIMA MD Andrew Harding said: “We have once again seen exceptional growth figures as ambitious school leavers, graduates and professionals identify CIMA as the global qualification that will best support their career ambitions.”
More needs to be done to counter the idea that accountancy is boring, says ICAEW President Mark Spofforth. He is concerned that new research shows that graduates think the profession offers little intellectual stimulus and makes no contribution to society. He explains: “Accountants are not seen as ethical or associated with sustainability issues and are dismissed as bean-counting nerds.” Research among the eight top-class universities in the UK found 77% of final year students had never considered a career in accountancy. Spofforth stresses that students’ perceptions are shaped most strongly by work experience and internships. “So views about auditing being a dull, deskbound job disappear when they go out on client visits and see that social interaction is a crucial part of audit work,” he claims. Interestingly, the research also discovered that where one parent, especially mum, is an accountant, then students are far more likely to consider accountancy as a career.
LEADERS NEED BROAD SHOULDERS
Tomorrow’s CFOs will need to have broad knowledge across all areas of the finance value chain, from strategy to performance measurement, reporting, risk, assurance and compliance. A new report from the ACCA stresses that finance leaders of the future will need these skills in order to be able to ask the right questions and ensure the businesses they work for are on the right track. ACCA CEO Helen Brand explained that the research shows that recruiters are looking to appoint the complete finance professional, and seek out newly qualified accountants who have both the breadth and depth of skills. She stressed that more than 80% of the CFOs surveyed felt it was critical that their accountants understand the finance value chain and how it all fits together. Brand added: “The finance team has to meet the challenges posed by a post-crisis global economy which is increasingly volatile, complex and competitive. Given the breadth of financial activities that finance leaders are now engaged in, it is hardly surprising that they are looking to recruit employees with a Helen broad range of skills Brand and understanding.”
NEW QUALIFICATION FOR UN STAFF
SALARIES UNDER PRESSURE Courses began last month to train over 150 United Nations Development Programme (UNDP) staff from nearly 50 countries in an international qualification from CIPFA, helping one of the UN’s largest agencies to cultivate development spending around the world. This accountancy qualification is the first in the world to be based on International Public Sector Accounting Standards (IPSAS), standards that improve transparency and accountability in public financial management and also allow for greater comparability between countries and public sector bodies. The qualification, dealing with public services, has been designed to meet the needs of all public sector finance staff from entry level to full professional. At the end of the qualification successful students will be entitled to become full members of CIPFA and add CPFA (Chartered Public Finance Accountant) after their name. Tuition will be provided in three languages – English, French and Spanish – with Kaplan Financial acting as CIPFA’s tuition partner for the English language students.
Accounting salaries are under pressure with pay freezes even more common than they were a year ago, according to the CA Salary Survey 2012/13. To counter this freeze many organisations are extending the range of benefits they offer. The survey found that the median salary for a manager (qualified Scottish CA) in an accountancy firm ranged from just over £40,000 to £60,000, depending on the size of the practice. As a manger in industry a CA can command between £31,000 and £40,000 (in a small business) and up to £70,000 in a publicly listed company. Ian Wilkinson of recruitment specialist Wilkinson & Associates said: “This is no surprise, given where the economy is right now, and we can expect to see more of the same next year.” The survey points up the differences in the way men and women view equality, with 70% of male respondents believing ‘opportunities are equal’ for men and women within accountancy, while only 38% of female CAs agreed with the statement. Just one in four female CAs polled agreed, however, that gender quotas should be applied to company boards.
World Class Performance Symposium
the numbers Three economists give their personal perspective of the UK economy and what needs to happen to get it going again
Jonathan Portes: ‘The cheque is in the post’ THE MOST surprising thing about the Budget 2013 for economist Jonathan Portes was that “there was no economic significance at all to it”. He was, however, a little critical about what he saw as the manipulation of the borrowing figures. In 2011-12, the UK borrowed £121bn, and this year it was down to £120.9bn. But, if you drill down the budget papers (4.118/119) you discover that we simply haven’t paid our bills. “We have told the UN, World Bank and other international institutions that the cheque is in the post,” he ventured. Portes suggested that this is not the sort of step change in financial management we are hoping for! He went on to say that it is irrelevant to talk about double and triple-dip recessions. We have had two and a half years of economic stagnation, and any recovery that is’ happening’ is the slowest in recorded economic history. What is really depressing Portes is the rate of growth, currently estimated to be 0.6% in 2013. That is pretty dismal and not enough to improve public finances. The debt is also set to rise until 2016 and 2017, but flatten out in 2018. That means deficit reduction has ‘stalled’. Portes pointed out that in 2010 the deficit came down because the government increased taxes and cut investment. What explains recent UK economic underperformance is clear for Portes: • Fiscal policy – predictable results, cutting too
quickly was economically a ‘significant mistake’. • Continued dysfunction of the financial sector. • Hit by commodity process/imported inflation. • Euro zone – self-defeating austerity. He pointed to the fact that in 2010 the Chancellor said he would have tackled the structural deficit in four years. “He has stuck to that and in 2013 it is still four years!” For Portes, what has been really missing is the importance of investment spending. Investment stimulus in 2008 helped the UK reduce the depth of the recession, but in mid-2010 “it fell off the cliff”. While the Chancellor has put up £3bn into infrastructure spending he believes we should be ‘investing’ more like £30bn. Pointing to other plans he said that no one is left defending muddling through, but that is what we have got. • Jonathan Portes, Director, National Institute for Economic and Social Research. (See notthetreasuryviewblogspot.com)
Mariana Mazzucato: ‘Credit where credit’s due’ Mariana Mazzucato feels it is time for rethink the role of the state and start to sell the good things it does. She said Keynes had the right idea when he said that government “must do things which at present are not done at all”. She felt that often government and Civil
Servants just don’t get the acknowledgement they deserve. Large parts of the research and development of the bio-tech and internet industries, for instance, has been heavily funded by government, she explained. She pointed out that it is a myth that it is always the private sector that is dynamic and creative. She gave plenty of examples where they simple come in after all the hard work has been done to ‘make the profits’. “Government is naive on the returns,” she said and emphasised touch screen, GPS and voice activated technology were all developed in public labs. She also suggested that there is no evidence that R&D tax credits will increase R&D in the right areas. She revealed that Pfizer’s R&D facility recently left Sandwich in Kent for Boston, where it had been offered big public funding. The US government’s health institute spends in the region of £32bn a year on research. This means that 75% of all new radical drugs current come out of these government labs, not the private ones. Mazzucato, on a roll now, said that the UK’s push for low tax and low regulation made it sound more like a Third World Country. She felt that the UK needs to put more value in its Civil Service, in order to attract top talent. Why, she asked, were departments paying incompetent companies to do the exciting things for which government personnel have the skills. She said government digital services didn’t need to be outsourced. Now that went down very well with delegates! • Mariana Mazzucato is Professor of Economics at the University of Sussex
Ian Mulheirn: ‘We are poorer than we thought’ There is little doubt for Ian Mulheirn that we have an economy in stagnation, and we are all in fact one-sixth poorer than what we expected to be today. This is having a profound effect, and a huge fallout for public services. For many departments there is going to be a productivity challenge and some tough choices lie ahead. For him there are three big problems: • We are poorer than we thought. • Health spending is eating into all other areas of public spending – it is rising by around 5% a year. • We live in an ageing society with rising state pension costs. That means even if you can raise productivity in public services it seems implausible that doing so could go far enough. For Mulheirn that means universal services will come under threat. It will be a basic choice between higher taxes or dismantling the ring fence. And, this choice is no more than 10 years away. • Ian Mulheirn, Director, the Social Market Foundation
World Class Performance Symposium
- a year of change AN “AWFUL LOT of progress is being made” – but there is still plenty of work to be done. That was the message to Government Finance Professionals from GFP boss Richard Douglas when he gave a ‘one year on’ review at CIPFA’s WCP. Describing progress in the various strands of the Finance Transformation Programme, now under the auspices of the GFP’s Financial Leadership Group, Douglas outlined some of the highlights which included: • The Financial and Commercial Awareness strand, led by the Ministry of Justice’s D-G Finance Ann Beasley, had road-tested a new Civil Service Learning SCS finance and commercial training module at the MoJ and the Department of Health. “The pilots have been a great success,” said Douglas. “This was central to putting finance at the heart of decision making for all civil
servants. My aim is for all SCS to do this training.” • A new Operating Model for Finance, looking to share expert best practice better, is being developed, overseen by Howard Orme, D-G Finance at BIS. It is designed to balance the needs of both central departments and arm’s length bodies, said Douglas.
• In terms of Value for Money, the focus post-Budget is on the 20152016 Spending Round. David Williams (D-G Finance, Ministry of Defence), has been working closely with the Efficiency Reform Group (ERG) while planning for the spending review in June, and embedding departmental efficiency plans.
Douglas told delegates: “We are working in very challenging circumstances, delivering spending controls while maintaining the delivery of services. We have a long way to go, but I believe we are building firm foundations on which to build.” Douglas cited a Civil Service World survey on attitudes to finance. He said: “Some 53% of those surveyed said they thought finance was valued by senior management, while 37% said finance was a high priority. We need to get these figures to 100%.” He added: “We also need to develop better metrics, and to this end the 17 largest departments are committed to implementing CIPFA’s Model for assessing financial management. This helps departments to improve by giving benchmarks of relative performance, and provides an evidence base for where they are doing well and not doing well.” Douglas concluded by challenging FPs. He said: “The environment around us is always changing and the challenge gets greater every day. What we need to ask ourselves is, are we going far enough fast enough?”
Management insights: a confection What are the leadership behaviours that need to be adopted to drive performance from the top? Lord Browne offered some insights CUP HANDS, HERE comes Cadbury! Those of a certain vintage will recognise the famous TV advertising slogan of yore, but for Lord Browne it was more a case of ‘clap hands, here comes Cadbury’. He used the example of the giant confectioner (along with that of US counterpart Hershey) to illustrate his thoughts on driving performance. He told delegates that the two companies provided models of how to manage incentives, set targets and lead effectively. Regarding incentives, “pay and promotion are only the beginning”, he said. “Most people want to do a good job and to be appreciated. Human beings like to be treated as human beings.” He added: “People will work hard if they are proud about what they do and are thanked for
must be clear about their goals. They it. I don’t believe Civil Servants are need to know where they are headed, thanked enough for what they do by why they are headed there, and the part their managers and masters.” they must play in the journey.” He cited the example of Hershey: Leaders must sometimes take big “If they paid a 20% dividend to personal risk. Lord Browne told shareholders then they would pay delegates that in 1997 he accepted the staff a 20% bonus.” This sent a signal danger of climate change – at the time to staff that they were valued and he was head of one of the world’s respected, said Lord Browne. biggest fossil fuel companies. “It was a On targets, the former BP Chair risk, but it put BP on the right side of believed they were “now treated with Lord Browne the argument,” he told delegates. suspicion”. This was often because Small acts of leadership can have big clear, achievable targets were not set, he said. consequences, too. For over 50 years, said Lord Those at the top should “make clear what you Browne, George Cadbury took Sunday school want - and then let staff achieve it. But the classes for adults. He did this without fanfare, target must be a meaningful one that can be but it demonstrated both his commitment to his measured. At Cadbury this led to individual staff employees and great leadership qualities. Civil being paid by results.” This went against the Service leaders can learn from his example, said grain of collective wage agreements, he said, Lord Browne – if they want the sweet taste of but sent a message of “real and lasting success. credibility” about the management. However, Lord Browne was quick to point out • Lord Browne was BP Group Chief Executive from 1995-2007. that heads of organisations must show real He is the Government’s lead non-executive director and member leadership. “Direction is important, and people of the ERG, and a cross-bench member of the House of Lords
count Kirstin Baker, the new Finance and Commercial Director at HMT, tells Gasette about her career to date and the challenges that lie ahead AS A RELATIVELY small policy-focused department, the Treasury’s key strength is its staff. Exposed to a wide variety of situations and tasks, the best develop an all-round expertise that enables them to switch seamlessly between roles. Kirstin Baker is the epitome of this all-rounder. Now responsible for overseeing the Treasury’s finances and corporate services and a member of the Treasury Board, she has deep reserves of experience including working as a senior policy official in the Treasury, heading the team responsible for co-ordinating public spending, and managing many of HMT’s interventions in individual banks in the wake of the 2008 crisis. Her almost 20-year career in the Civil Service was recently interrupted by a year’s maternity leave; she returned to the fold in January to her new position to replace Julian Kelly, who is now Director, Public Spending, at HMT.
COMPETITON POLICY “I’m lucky in that I’ve done lots of different things,” Baker told Gasette. “Initially, I joined the Foreign Office, focusing on Europe. Working for the European Commission I specialised in competition policy and led on some big decisions on airline alliances. I also worked in the European Secretariat in the Cabinet Office, co-ordinating EU policy within the UK. “Gradually, over time, I worked more on financial and economic issues. I was interested in working at the Treasury and got the opportunity to come over on secondment to project-manage the 2004 Spending Review. I really enjoyed it and wanted to stay in Treasury. I then worked in corporate finance and became Head of General Expenditure Policy, developing expertise in public spending and acting as a key adviser to 10 theGASETTE
ministers on the management of the public finances.” The most turbulent time in Baker’s career – and one with the most pressure and the steepest learning curve – was to follow. She explains: “By 2008 I was looking for a new challenge. I became Head of the Northern Rock Shareholding Team, just after the nationalisation of the bank. I thought it was going to be an interesting if relatively quiet job. Over the summer of 2008 the crisis got worse, and my role gradually expanded, working on interventions in some of the other banks – Bradford & Bingley and the Icelandic banks that collapsed as well as the recapitalisations of RBS and Lloyds. “It was a real crisis point – we were working late into the night and every weekend for a time. Subsequently, I was part of the leadership team for the Asset Protection Scheme, particularly working with Lloyds on a package of support and negotiating pricing and state aid clearance with their senior management.” While a stressful period, Baker appreciated the experience. “None of us were prepared for what happened, because nothing similar had happened before,” she says. “Treasury is now much better prepared were we to face a serious banking crisis again. We’ve got contingency http://www.thegfp-treasury.org
plans, and staff have developed significant expertise. In 2008 we were dealing with the unexpected and the unknown. It was a very demanding time – we were designing and delivering interventions under immense time pressure. It was a steep learning curve for all of us. But it was a very fulfilling time, working with a really good team of people who were very motivated and committed, going well beyond what would normally be expected of them and doing an amazing job.”
FRESH CHALLENGE In 2010 it was time for a fresh challenge, with the worst of the banking crisis over. “I was keen to get out of Treasury for a while,” says Baker. “So I went on secondment to the Scottish Government, managing work on infrastructure investment and capital planning and on business engagement.” This gave Baker a chance to get more involved in the detail of managing spending and to experience different ways of spring 2013
‘One of the things that I’m keen to encourage is that we do have a strong finance network, and that we bring people in different roles across the department into the financial community’
working. “It was good to get out of Whitehall and get a different perspective. There is a more collaborative culture in Scotland and a sense that you need to bring everyone with you to get things done. It was an interesting change from Treasury and I worked with some great people.” Not one to let the grass grow, Baker also turned her attention to a more personal challenge – getting the CIMA qualification. “I had a bit more time, and I’d been thinking about getting a qualification that dealt with fiscal, financial and accounting issues. I thought it would be useful to have, to help in my career, and would consolidate my existing knowledge.” Remarkably, Baker passed the qualification in just two years. “I did it off my own bat. I found the Strategic exams easier, because of my work background, but the nitty-gritty, having to produce a set of accounts, I found more difficult.” On a career level the CIMA qualification has already opened doors for Baker –without it she wouldn’t have landed her current role. Furthermore, she believes it is important that financial skills inform the Treasury’s work as both an economic and finance ministry. spring 2013
“On the economic side, if you look at some of the things we are doing to promote growth, like the housing measures announced in the Budget or the infrastructure guarantee scheme, these involve complex financial transactions, and you need financial as well as economic expertise in order to design those.”
ANNUAL BUSINESS PLANNING Baker said while the Treasury has a very strong network of economists, “traditionally the finance ‘cadre’ has felt a little less well loved”. She said: “One of the things that I’m keen to encourage is that we do have a strong finance network, and that we bring people in different roles across the department into the financial community.” In her new role, Baker sits on the Treasury Board and has just taken part in the department’s annual business planning round. She says: “I’ve been impressed with the quality of information we now have and I think there has been a huge improvement in recent years. We now get finance and HR information on a monthly basis as well as reporting to ERG quarterly on a range of indicators, and we’re http://www.thegfp-treasury.org
setting up a Management Information Unit within the corporate centre in Treasury to streamline production of some of this information. We’re getting better at it; I think there’s been more focus from the top on the importance of management information, from successive Heads of the Government Finance Profession, and also from Treasury ministers.” She added that the current economic situation has put a focus on improving management information. “It was there before, but now we’re all living with reduced resources, and a reduced number of people. We need to make sure we have the relevant information, so we can understand the cost base and make informed decisions about prioritisation.” The GFP has a “really important role to play” going forward, says Baker. “Finance professionals have a key role to play in driving efficiency and lots of parts of Government are involved in quite complex transactions, whether as part of procuring services or in supporting business, so it’s really important to have the financial skills to help advise on these areas. “And things like the graduate training scheme are vital in attracting good people into Government. A lot of graduates looking at the labour market will find the opportunity to get more qualified while getting paid to do a job very attractive.” She said finance professionals now have much more ownership of the financial management improvement agenda than in the past. They are the experts, she said, and finance directors and the Finance Leadership Group in particular are now responsible for setting the agenda. “It’s a work in progress, but it is a much healthier model than the Treasury telling people what to do,” she said. So how does Baker relish her role in potentially bring challenge to the decisions of the Treasury Board? “The Board generally acts in a collaborative way – coming in, I’ve been impressed,” she laughs. “It’s a good mix of people with a Treasury background, and those who have come from outside. It’s a good team. All the Directors-General are aware of the fiscal situation, so it’s not the sort of situation where Continued on page 12 theGASETTE 11
Making experience count Continued from page 11 you’re having to convince D-Gs of the need to prioritise – we are all realistic about the resources available.” The financial challenges facing Civil Servants affect both boardroom and shop floor, and finance professionals across the piece are facing a uniquely difficult set of circumstances. The mantra remains ‘using taxpayers’ money wisely’, so what skills and attributes are most of value? “Flexibility is key. That’s probably always been the case, but it’s only going to become more important, especially for those just coming in [to the Civil Service] and starting their careers. You need to be ready for change; don’t think of yourselves as a finance professional with a narrow focus – think about where your finance skills can add value. I’d encourage people do a range of things early in their careers. Broaden your horizons and get experience in different roles or different departments before deciding to specialise. “You need to be able to think outside the box and apply yourselves to different things. Those who fill the senior positions in the future will be those who have a range of experience and can see the bigger strategic picture as well as understanding the financial detail.”
‘I’d encourage people do a range of things early in their careers. Broaden your horizons and get experience in different roles’
On a personal level, Baker is adjusting to working part-time for the first time in her career, following the birth of her son in 2012. “I work three days a week, which means I have to prioritise more than I did when I worked full time. I share management of the Corporate Centre Group in Treasury with our HR Director
and I’m lucky to have a good team of Deputy Directors and excellent administrative support, all of which makes my job manageable. But I’m still learning how to get everything done in the time I have. It is a good discipline though – knowing you have a limited time in the office each week really focuses you on getting the important things done. And spending four days a week looking after a toddler helps me keep work in perspective.” Baker says she doesn’t have a long-term career plan. “I like to take on different challenges, but I honestly can’t say what I’ll be doing in 10 years’ time,” she says. “At the moment I’m just focused on doing my best in this job.” What is certain is that she is enjoying her new role, and is relishing the challenges it will inevitably bring.
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KEEPING SAFE AND
SOUND CYBER SECURITY has entered the general public’s consciousness following a number of high-profile incidents affecting household name brands. At the same time, the threat to economic prosperity posed by cyber crime has pushed the topic up the boardroom and political agendas. The bi-annual PwC Global Economic Crime Survey published in November 2011 saw 26% of all respondents having had a cyber crime committed against their organisation in the last 12 months. Eight per cent of these respondents were public sector entities and the trend is only increasing in terms of the average cost and impact of breaches experienced by UK government organisations. This has brought cyber crime from a position of statistical insignificance in previous surveys to third place in terms of prevalence, eclipsed only by more familiar sources of economic crime such as asset misappropriation and accounting fraud. While cyber security is a national issue that has required the establishment of a specific programme, there are also operational issues faced by departments in implementing their own cyber security functions. The annual UK Cyber Security Breaches survey, that PwC prepares in conjunction with the Department for Business Innovation and Skills, highlights that UK government departments currently spend 6% – 8% of IT budget on cyber security with little or no increase in spend spring 2013
Just how safe is your network? Andrew Miller poses the question – and quotes some frightening statistics concerning cyber crime
anticipated this year. This puts government departments behind the likes of financial services, telecoms and manufacturing, which each budget around 10% of IT budget for cyber security. To compound this budgetary challenge, the PwC UK Cyber Security Breaches Survey 2012 indicates that 80% of large organisations do not formally evaluate the effectiveness of information security spend, so it is unclear what value this level of spend represents. Focus on cyber security as a departmental operational responsibility within the public sector has fallen off the radar, with the main National Cyber Security Programme grabbing the attention. Departments, though, are on the front line of the security mission, handling significant quantities of personal and sensitive information on a daily basis. The drive for efficiencies through the Digital by Default strategy and the clear demand for shifting these services online from the public has steered the public sector to become a highly digitally integrated group of entities with much of its underlying infrastructure or information manipulation outsourced to private sector third parties. http://www.thegfp-treasury.org
Worryingly, our research indicates that the most senior people within organisations are not placing enough emphasis on the importance of managing the real threats that cyber security presents, with nearly half of Boards not reviewing the threat more frequently than annually. Is cyber security on your risk register? If not, why not? As a result we recommend public sector organisations should re-evaluate the cyber security situation they are in by asking the following questions: • Organisation and governance: Do you have an information risk-led approach; effective governance for and accountability to reflect cyber security’s importance to the business? • Threat intelligence: The cyber threat landscape is changing at an alarming rate. Do you have the capability to acquire and act on threat intelligence? • Security culture and behaviours: A security conscious organisational culture, accountability and associated behaviour is one of the most important aspects of improving security. How mature is this culture in your organisation? • Cyber incident response and crisis management: Do you have the ability to respond to inevitable incidents quickly and effectively and in a way that protects your reputation, brand and other assets? • Monitoring and detection: As perimeters become more porous, attackers more sophisticated and compromises inevitable, monitoring and detection become necessary and, arguably, the most effective defence. Is effective monitoring in place? • Strong defences and IT hygiene: Do you have mature and embedded secure configuration, patch management, antivirus defences, privilege management, authentication, mobile security and change management?
MITIGATE RISK Having comprehensive answers to the questions above, along with annual measures of effectiveness, will help ensure that the budgets available for cyber security are spent wisely and actually mitigate the risks the organisation is experiencing. Ask the Senior Information Risk Officer what actions are under way to ensure cyber security is dealt with and what assurance can be provided to the board that the organisation’s cyber risk is being managed at this critical time. • Andrew Miller is Director, Risk Assurance Services at PwC. Contact firstname.lastname@example.org theGASETTE 13
Values Versus Violence
Back to school Mark Wilson, Financial Controller at the Identity and Passport Service, talks about his time as a volunteer for the Values Versus Violence charity
which included finance roles in civil engineering businesses, and the children were fascinated by the size and scale of the projects that I was involved in. It was an very positive experience. The children were so genuinely interested and had so many questions. I have no hesitation in recommending the experience and would encourage others to get involved in this very worthwhile initiative.
WHAT THE CHILDREN SAID…
IN THE AUTUMN 2012 issue of Gasette, Sharon Evans wrote about how the Values Versus Violence scheme is helping children understand money and how valuing employment is important if we are to prevent children being drawn into crime. She explained how GFP volunteers going into schools are welcomed by teachers and highlighted the positive reaction that volunteers can expect from the children. After an afternoon in school volunteering to talk to children about my profession I was impressed both by the children’s enthusiasm and what a positive experience it was. The visit was part of the Value Versus Violence’s missdorothy.com learning programme, which teaches children to value themselves and others. An important part of the programme is meeting outside visitors. As a first time volunteer I wasn’t quite sure what to expect when I was met at the door by three Dot Com ambassadors, who greeted me beautifully and made me feel very comfortable. It was the children’s job as Dot Com ambassadors to tell me what they learn from the missdorothy programme. The programme helps children aged 7-11 14 theGASETTE
learn how to value themselves and how to value others and so make better choices and decisions. They learn about the value of money as part of the programme, and each child receives their own journal in which they can write about all the things that are important to them. Volunteers from GFP are helping teachers with the value of money section of the journal, and helping children understand how money can keep you safe or make you unsafe depending on how you handle it. The idea is to help prepare children for real life, and also to give them an opportunity to hear from adults other than their teacher about what life is like and particularly what life is like in the workplace. The children were very interested in facts and figures, and because I am from the Identity and Passport Service they wanted to know how many passports were made and sent out each year, and other key facts about the Agency. I talked to the children about why I enjoyed working in finance and how you can move around to lots of different posts if you have transferable accounting skills. I also talked about my work before I joined the Identity and Passport Service,
Sharon Evans and Neil Evans of VVV with children who have participated in the programme. The photo was taken at the GFP Training Event at Brighton in November
“It is great having people come into lessons and talk to us,” said one of the children. “It is really fun to hear from other people, not just our teacher. That’s the great thing about the missdorothy programme, we get to talk to lots of visitors and we look forward to it.” Wendy Phillips, who is seconded to support the programme in London and funded by the Mayor’s Fund for London, added: “The input from volunteers has been great. The children love hearing about the work they do and it helps them make sense of their learning. They understand why they are learning maths and budgeting and how it fits into the bigger picture of work. But you never know what questions are going to be asked. One year-three pupil who was only seven put his hand up in a session with a volunteer from HMRC and said: ‘What’s going on with Harry Redknapp’s tax then?’ You couldn’t help laughing, but the volunteer was very professional and said unfortunately he couldn’t discuss individual cases!” GFP supports Values Versus Violence UK (VVVUK), the organisation that created the missdorothy.com programme. There have been a number of GFP volunteers support lessons, but VVVUK is always looking for more volunteers. You can volunteer to Adopt a School and talk to the children or fund raise for the programme, which costs £5 per child. Sir Gus O’Donnell and Ian Watmore have been among the Civil Servants who have supported the learning programme and Geoff Merchant a volunteer from Cabinet Office, spent more than six years helping the organisation create strategy for a national roll-out of materials. spring 2013
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GFP Awards 2012
All the winners Who walked off with the prizes at the GFP Awards night? Well, meet the stars of the show!
Prize guys: the winners show off their awards in Brighton
ROLL OF HONOUR Outstanding Contribution to the Profession The Government Olympic Executive Finance Team, the Department for Culture, Media and Sport
Finance Director of the Year Sue Ketteridge, Director of Finance, Maritime & Coastguard Agency
Project Team of the Year The Efficiency & Reform Division, the Department for Education
Sustainability Award The Green IT/Finance Team, HMRC
Personality of the Year Martin Rowlands, Her Majesty’s Courts & Tribunals Service Innovation in Government The Admin Consolidation Team, the Department for Business, Innovation & Skills Government AAT of the Year Katie Kibble, Ministry of Justice PQ of the Year Bandhu Pratim Das, the Skills Funding Agency NQ of the Year Sherie McLean, Department for Work & Pensions
Unsung Hero Dale Coxon, Ministry of Defence
Mentor of the Year Stephanie Smith, OFSTED Finance Team(s) of the Year • The Corporate Finance & Military Capability Team, Ministry of Defence • The Finance, Planning & Performance Team, Treasury Solicitor’s Department Effective Leader of the Year Amanda McFeeters, Head of Accounting & Finance Unit, Home Office Head of Profession’s Award for Lifetime Achievement David Reeves, Ministry of Defence GFP Special Award Steve Freer, CEO CIPFA http://www.thegfp-treasury.org
Katie Kibble, left, the Government AAT of the Year
GFP Awards 2012
BRIGHTON’S HILTON METROPOLE was the venue for the 2012 GFP awards, which were co-hosted by Sharon Evans and Lizzie Greenwood-Hughes. It was another record year for entries and the list of winners shows the great diversity of the GFP family. Among those who came out on top was Katie Kibble, the Government AAT of the Year. She works for the Ministry of Justice, and at a local level gets involved in planning and running award ceremonies, so it was a very nice surprise to turn the tables on her. For once she wasn’t asked to move furniture or help with the washing-up afterwards! The Lifetime Achievement Award went to David Reeves, who has a long history of supporting the GFP agenda both within his department (MoD) and corporately at HM Treasury. David was also a strong champion for the profession and for wider financial training across Whitehall. Occasionally the GFP also makes a special award to someone who has made a significant personal contribution to the profession. This year was such a year and that special person was Steve Freer, CIPFA’s CEO. He was both surprised and visibly moved by the honour. The GFP awards give departments a unique opportunity to shine. The call for nominations for the 2013 awards will be coming soon, so keep an eye on the website and, of course, keep reading Gasette magazine. Just in case you forgot the website address is www.thegfp-treasury.org.
David Reeves picks up his Lifetime Achievement award
Steve Freer with Head of the GFP Richard Douglas
Martin Rowlands of HM Courts & Tribunals Service hot-foots it to the stage
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Women in finance
Where are the women? IN OUR GLOBALIZED world diversity is seen not only as an ambition but crucial to delivering more effective government and increased economic competitiveness. But while diverse teams are proven to stimulate innovation and new ways of problem solving, there is an increasing acknowledgment that much work remains to be done before governments and business become truly representative of the societies in which they operate and serve. Most governments are aware of the benefits of promoting a more balanced gender mix. Unfortunately, as in other sectors, the gender distribution across leadership roles in government is not representative of the number of women in the community, in the public sector workforce and in higher education. Ernst & Young’s survey of senior public sector roles across G20 countries shows that only four of them reached even 30% representation of women in leadership roles, despite women constituting a significant part of the overall public sector workforce in many countries. Even in Canada, the country that ranked number one in our Index, they account for only 45% of its public sector leaders. No other country comes close to
Ernst & Young’s latest survey reveals the true picture of gender equality across governments internationally this figure, with the numbers of female leaders in the following six countries in the Index hovering at around one-third. The United Kingdom appears in third place in the Index with 35% of public sector leadership roles filled by women, reflecting the positive action that has been taken over the past few decades. However, women represent 66% of the UK public workforce and so clearly, more progress needs to be made to support women advance their careers. Lord [Gus] O’Donnell, a former UK head of the Civil Service and Cabinet Secretary, says the results from the UK public sector are “good, but we could and should do better”. The public sector leadership results are better than those for our elected politicians. Although almost a third of leaders in the public sector in the UK are female, our numbers of female ministers and women in Parliament are lower than in Canada, Australia, South Africa, Argentina, Germany, Mexico, France and the US. “All political parties are on record as saying they want to increase the
proportion of women in Parliament. But it’s just not happening,” says Lord O’Donnell. So, what is the gender mix at the top of the Government Finance Profession? Actually, the position closely mirrors the broader national landscape. In the top 17 spending departments, three out of nine Director-Generals are women and three out of eight Directors are women. At Ernst & Young, we believe that diverse teams can lead to better decisions and results. Diversity of approaches, points of view and thinking contributes towards improved performance and in the Government Finance Profession, we need this now more than ever. Governments around the world are facing up to a rapidly changing world. Shifting demographics, urbanization and climate change, as well as the lingering effects of the financial crisis, demand great leaders at the decision-making table. Unleashing the talent of women can bring powerful positive change and increases the likelihood of better outcomes for us all. Across the globe there are many women leaders in the public sector who have a great story to tell. We invite Gassette’s women readers to join us at www.ey.com/government/womenleaders to be inspired by the lives and ideas of some public sector women leaders who have joined Ernst & Young in this global initiative. • Thanks to Ernst & Young for this article
2012 G20 Index of Women as Public Sector Leaders 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th
Canada Australia United Kingdom South Africa Brazil United States Italy France Argentina Germany Mexico Turkey Russia China Indonesia South Korea India Japan Saudi Arabia
45.0 37.0 35.0 33.8 32.1 31.0 27.0 21.4 19.0 14.5 14.0 13.6 13.0 11.5 8.7 8.6 7.7 2.5 0.0 theGASETTE 19
Women in finance
Leading FROM THE FRONT
It’s a man’s world. Or is it? Two women from very different backgrounds and aspirations illuminate the world of opportunity that finance opens up to the gentle sex
PUBLIC PERCEPTIONS OF THE finance world are rarely flattering, possibly less so than ever before. Stereotypes cast a long shadow – unscrupulous bankers with their unfeasibly large bonuses or dull grey men in suits squinting myopically at yawn-inducing rows of figures. And yes, even in these enlightened times, although the day of the little woman meekly holding out her hand for the housekeeping money is long gone, finance is still viewed as a domain predominantly presided over by men. “Part of the problem is that women themselves don’t realise how much they can offer the accountancy world,” explained Abigail Jones, FMDS trainee accountant at Ofsted. “More men than women still go into finance, possibly because women see it as a profession for people who don’t like people. Nothing could be further than the truth. Although areas such as forensic accounting may be less people-centred, in Business Partnering, and others, excellent interpersonal skills, in addition to business acumen, are fundamental to success. “Many women don’t realise how Abigail Jones valuable their soft skills are. I don’t have the best analytical skills going, but I can talk to people and that really matters.” Abigail argues that finance offers anyone of either gender enormous opportunities if they are “bright and keen to learn.” Her own route into the GFP highlights that aptitude, rather than relevant experience, is what opens this career door. After taking a law degree at university, she qualified as a solicitor Frances Carter 20 theGASETTE
and went to work in the USA for two years before moving back to the UK to work in a private practice specialising in commercial property law. “That really was a very maledominated area,” she said. “Some of the men were bombastic and the few women who had made it were aggressive, lacked empathy and were reluctant to have other women in the profession. When http://www.thegfp-treasury.org
the recession hit, I moved to Bristol and took a temporary job at Ofsted in CIE in compliance and then moved to the data team. When I saw an ad for the Government Finance Profession Scheme, I decided to apply. I’d always liked working with figures and had enjoyed the tax aspects of law.” Abigail is working towards her ACCA qualification, which she hopes to gain in 2015. “I am the only female in my office, but there are wonderfully supportive women in my team based around the country, including our female spring 2013
Head of Finance, in Manchester, and the dynamic is very positive” she said. “My current male colleagues have the intellect of solicitors without the ego and we all have the same approach to work and interact well. But of course we’re luckier in the Civil Service than in many other industries – equality is a given.” For Frances Carter, Audit Business Manager at the Internal Audit Unit of the Department for Education, getting started in her finance career back in the 1980s was far more problematic. After significant changes being made to her post as a nursery nurse for a local authority, she applied for a job as an Executive Officer with the Civil Service and was told: “I’m really sorry, but there are only openings in finance.” The accountant Frances began working for suggested that she also studied to become an accountant, but she encountered her first barrier when she applied to get on to the bursary scheme. “The then Head of Accounting Profession, who was a woman, said that she didn’t know if she would support my application as it was a lot of money to train someone when there was a chance I’d “go off and have babies” as soon as I qualified,” she explained. “I must have convinced her that I wouldn’t, but I did have to sign an agreement that I would stay working with the Department for a period of time after qualifying, although that was probably true for everyone. Perhaps she was just testing my resolve... but I’m not convinced.” Frances, who gained her ACCA qualification through distance learning, is now part of the management team in the Internal Audit Unit and is confident that she has never been passed over for promotion because she is a woman. “I’ve taken a variety of jobs to widen my experience and I tend to be motivated by interest rather than a desire to rise in the ranks,” she said. “Sometimes you just outgrow a job and it’s time for the next challenge. “Women are well represented in my department – the Head of Internal Audit is a woman and so is one of the deputies. The Service is particularly good at allowing career breaks and for women to come back on parttime basis. Of course it’s difficult to know whether taking that option affects how far they go in the organisation but it doesn’t seem to be a problem in our department.” Abigail and Frances are at opposite points in their careers. While Frances contemplates the prospect of retirement with some relish, Abigail is tempering her aspirations with realism. “I tell my husband that I want to be the next Chancellor of the Exchequer,” she said. “But that isn’t about to happen. It may sound a bit clichéd, but I really want to use my skills to make a difference in the world. Perhaps as the Head of the NHS one day. Yep, that would do nicely.”
Training is the key The NHS Foundation Trust is a big believer in staff development. Helen Rourke shares her tips on training finance staff of all skill levels and abilities through a formal qualification THE NHS FOUNDATION Trust has supported a significant number of finance staff through formal training for a number of years. We are strong believers in career development and encourage all staff to participate in further learning no matter what stage they are at in their career. Of the 80 staff that make up our finance team, a large percentage are qualified through AAT or another accountancy body. Many have either completed or are completing their training across Levels 2-4. In 2011, we were approached by AAT to be involved in a pilot for a Level 1 qualification called AAT Access. We saw this as an opportunity to develop those staff members within our finance department who didn’t yet have a qualification or the confidence to take on Level 2. AAT Access is a basic introduction to finance and accountancy and is suitable for anyone regardless of age, knowledge or experience. Essentially, it’s a ‘taster’ for the full accounting qualification. We nominated four staff members to be involved in the pilot. Their ages ranged from 32-46 and all were from a management accounting background. Some had not studied for years and others were unsure of what the course could offer them. But since completion, all have been more enthusiastic towards their career development and have progressed on to Level 2. Although it’s still early days, we’ve seen clear results of our investment. Their attitudes to training and development have changed significantly and clear correlations between their studies and the working environment are apparent.
TOP TIPS TO TRAINING FINANCE STAFF
Find the right qualification. It’s important to identify the right qualification for your staff members so that you can be sure both you and they will get the most out of your investment. Most accountancy bodies have a ‘skills test’ (such as the AAT Skillcheck) where
prospective students can test their knowledge and identify an appropriate starting level. Find the right training provider. The way your training provider delivers the course and supports your students will ultimately determine their success. Together with iCount Training, the NHS Foundation Trust developed a model of study where students attend classes one day per week at a Lancashire Teaching Hospital site. Find the right candidate. Identify staff members who show potential and a keen attitude for career development. You want to be sure your investment is worthwhile in more ways than one. Training those without formal qualifications will not only produce better skilled workers, but mentors for others to learn from in the future. Offer support. Keep the conversation open so you’re aware of your staff members’ progress and any obstacles they face. A mentoring programme, using more experienced staff members can offer direct support and increase chances of success. Evaluate success. In this economic climate, it’s important that you demonstrate your return on investment. Implement evaluation measures from the beginning by highlighting competencies across different tasks so that you can evaluate outcomes, demonstrate success and gather support for future staff development programmes.
• Helen Rourke is Assistant Finance Director at Lancashire Teaching Hospitals, NHS Foundation Trust
• Thanks to the ACCA for this article spring 2013
Performance management in Whitehall:
A CIMA PERSPECTIVE Leadership teams must bring in more experts from the finance profession who can analyse and exploit management information IT IS GOOD NEWS that the debate on how to improve Whitehall is gaining momentum. However, although new initiatives are to be applauded, it is CIMA’s view that no substantial progress will be made unless such initiatives are driven by clear and concerted financial leadership. Last year, CIMA, the Institute for Government and Deloitte joined forces to produce a strategy that would lead to better decision making and more efficient government. This report, Improving Decision Making in Whitehall, focused on how to improve the use of management information at the heart of government. It showed that systemic improvements in management information would only be achieved through increased demand for management information by senior decision makers. This, in turn, highlighted the importance of financial leadership in improving performance management at the top of government departments. CIMA and the Institute for Government pursued this subject further through business reference texts, surveys and interviews, and our findings will be published in the forthcoming report Financial Leadership for Government. The aim of this research is to provide a structure for opening up the debate about the role of financial leadership at the centre of large, devolved organisations and to support the Government’s work in building ‘a much stronger corporate leadership model’ as set out in the Civil Service Reform Plan. The new report makes some important comparisons. Firstly, we looked at how financial leadership in corporations compares with the Whitehall model. We then compared the UK central government administration with those of New Zealand, Australia, Canada and the US in terms of how performance is managed and how this relates to financial leadership. Our research showed that the role of the finance function in supporting performance management is weaker in Whitehall than in the private 22 theGASETTE
sector and, compared with the other countries in our study, this weakness is unique to Whitehall. It is also noteworthy that the UK is the only country in our study where the organisation responsible for expenditure control (HM Treasury) does not take lead responsibility for performance management and, therefore, the Treasury http://www.thegfp-treasury.org
plays little role in providing performance management support to the Head of the Civil Service. Neither is it responsible for generating any cross-government information to underpin performance management. There is currently no other point at which either financial or nonfinancial information is brought together to form a clear analytical overview of the performance of departments. Some interesting initiatives have been brought into the equation – such as the Cabinet Office’s Business Plans and the Quarterly Data Summaries – but these have had limited success so far. On cost management, the Treasury typically acts as a reviewer of other departments’ work but its interest is focused more around requests for additional resources or as part of ad hoc spending reviews. There is relatively little systemic pressure on departments to enhance their understanding of their own cost drivers and no formal processes of enhancing understanding of crossdepartmental cost drivers. From a CIMA perspective, departmental leadership teams must bring in more experts from the finance profession who can analyse and exploit management information. This is precisely the contribution management accountants make in the best businesses. They provide the right information and analysis, derived from both financial and non-financial data, so that CEOs can decide how best to drive businesses forward. Management accountants have the potential to become Whitehall’s financial navigators. CIMA’s view is that a central group finance function and CFO is an essential prerequisite for strengthening the obvious structural weaknesses within Government performance management. This represents a significant opportunity for the finance profession and the Prime Minister must implement this change as part of an overall government strategy. The resultant performance improvements will not come overnight; we are at the start of our journey, but there is no time to waste. spring 2013
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at the The UK FACES tough decisions in the coming decade. According to the Office for National Statistics, public sector net debt was £1,111.4 billion at the end of December 2012, equivalent to 70.7% of our country’s GDP. Combined with current levels of economic growth, it is now clear the Coalition’s debt and deficit programme will take successive parliaments to deliver. We are also living longer as a society. The UK’s population of 65s and over is likely to double to 19 million by 2050. This will mean extra demands on health services, social care and pensions. Given these trends decisions today, including this summer’s Spending Review, will have a profound effect on the public services of tomorrow. ICAEW is developing its thinking on the financial skills and structures that are needed to empower policymakers to make these decisions. Managing taxpayers money wisely is what our members in the public sector do daily and it is central to ICAEW’s public interest mandate. We want to support this further. The UK is already a global leader in public sector transparency. HM Treasury produces an annual set of consolidated accounts (the Whole of Government Accounts). The National Audit Office scrutinises public spending on behalf of Parliament and the Office for Budget Responsibility provides independent analysis on the state of public finances. Yet if we want to retain this position, policymakers must pursue best practice not only from other governments but also the private sector. And while the private sector is not without its faults, spring 2013
Is there a role for a CFO at the top table in government? ICAEW Chief Executive Michael Izza believes there is being different in fundamental ways from the public sector, there are some practices and structures that are worth exploring. This includes the Chief Financial Officer (CFO) role and Group Finance structure. While roles or structures alone are not a panacea, the CFO and group finance structure have a tradition of supporting good financial management and complex organisations. Most global companies would not exist, far less thrive, without a CFO operating alongside the CEO within a rigorous structure accountable to the board. Regardless of whether an organisation is in the private or the public sector, is a business or government, financial leadership and strong fiscal structures are essential. As Downing Street recently said: “Any major organisation would expect and hope that the chief finance officer worked very closely with the chief executive.” In our current environment of stretched public finances this is more important than ever. ICAEW believes we need a CFO at the centre of government providing financial leadership in ways that currently does not happen. By setting this tone from the top we believe you can equip the next generation of Civil Servants in ways and means that are a prerequisite for managing our deficit and debt. Such a transformation will require both Civil Service reform and ministerial commitment. As a chartered accountant I believe
• Michael Izza is Chief Executive of the ICAEW
that without change, the UK will exacerbate an already difficult period of economic instability and uncertainty. This three-stage reform proposal can help accelerate financial discipline across Whitehall. We are calling on politicians from all parties to: • Transform the role of HM Treasury into a more pro-active finance ministry. It should take a more rigorous cost/benefit analysis of policy delivery with regular reviews and have an ability to speed up or slow policy change. • Create a Chief Financial Officer (CFO) to head up this group finance function. This CFO will report to HMT’s Permanent Secretary and to the Chancellor/Chief Secretary and, ultimately, to the Cabinet. This new CFO would take overall responsibility for the financial health of government. The person is likely to have experience of commercial group structures as many current departmental non-executive directors do. • Finally, to empower finance directors more generally across government departments to communicate and equip others in commercial skills. This will enable the embedding of strong financial disciplines and financial leadership across a new generation of civil servants. While fiscal transparency is central to this task, information alone will not be enough. Financial skills, an enabling environment and pursuing best practice is also necessary. Public sector financial management is already changing and ICAEW will continue to work with government to help support commercial skills. But more fundamental change now needs to happen to ensure taxpayers money is spent wisely in the future. theGASETTE 25
MORE TALES FROM THE
In the last issue of Gasette we spoke to Timothy Gall and Martin Mills about their secondments at M&S. Here we catch up with their progress SO HOW DID IT GO? The secondments went really well. So well, in fact, that Tim arranged for his secondment to be extended by a further three months. It has been a great opportunity to see behind the scenes of one of the UK’s largest and most popular retailers. We’ve worked on some interesting and challenging projects, had exposure to a wide portfolio of M&S learning and development courses, as well as meeting some really nice people and making new friends.
WHAT IS THE KEY THING THAT YOU HAVE LEARNT? It has been a great opportunity to benchmark our skills and abilities against those in the private sector. Finding out that you can contribute and thrive in that environment is a real boost to your confidence, particularly when the contrast is as extreme as the defence and revenue sectors when compared to a retail environment. M&S is very good at giving its finance staff learning opportunities and as such we’ve had lots of exposure to their training resources including specific courses on things like ‘commercial negotiations’. They have a learning week each quarter with around 15 sessions, many run in-house. They also have a quarterly finance conference with input from a keynote speaker to help them understand the strategic issues for the business.
HOW WILL THE SECONDMENT BENEFIT YOUR DEPARTMENT AND THE WIDER GOVERNMENT FINANCE PROFESSION? Our experience has shown that there’s undoubtedly a lot that the GFP can learn from M&S, including the commercial issues of running a large, fast-paced organisation, which is geographically widespread and investing £750m into capital and IT expenditure. Understanding the M&S financial statements, key performance measures and projects and how the business operates internally in order to provide a big picture understanding of the business is something we can both take back into our roles within government. We’ve also had beneficial exposure to the importance of an engaged workforce, appropriate structures and strong learning and development programmes.
WOULD YOU RECOMMEND IT TO OTHERS? We’ve also learnt from the specific project we’ve been involved in. We don’t have issues with contactless payments in the MoD and revenue isn’t a key part of our business, but many of the skills and techniques I’ve learned are equally applicable in either sector.
HOW WILL THE SECONDMENT HELP YOUR CAREER? It has given us the opportunity for both personal and professional development. We’ve learnt new skills, broadened our work experience and improved our competencies, particularly in areas such as Communication and Influencing stakeholders. Clearly this means we have more to offer an employer than we did before the secondment and therefore we need to ensure we make the most of the things we have learned in our future career.
Yes, this is a great opportunity to gain experience and challenge yourself in a way, which you’d be unlikely to achieve within the Civil Service. It clearly has benefits for us as individuals, M&S and the GFP as a whole, and participating in the secondment presents a unique opportunity for personal and professional development. Many people only manage a minimal amount of CPD, but the secondment offers six months worth of exposure to new skills, tools and techniques. In addition to this, the UK retail sector is facing some major challenges, with many brands disappearing from our high streets. The secondment offers a ‘behind the scenes’ chance to see how one of the UK’s largest retailers is adapting to the changing environment, and what it is doing at a strategic level.
Meet Tim and Martin
Timothy Gall ACMA CGMA Tim joined the MOD in 2007 as the Finance Director for the Defence Storage & Distribution Agency (DSDA), where he played a key part in the successful delivery of a £441m transformation programme. Other roles include Head of Corporate Services and Head of Strategy. Prior to joining the MOD, Tim worked in the private sector and for the Audit Commission. Martin Mills MBA ACMA CGMA Martin joined HRMC in 1977 and is currently working as Financial Controller, Personal Tax. He has held numerous high-level finance and strategy roles within HRMC and has contributed extensively to the financial development of a department undergoing great organisational change. 26 theGASETTE
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discipline and is best done in a spare lecture room or a quiet room at work. Does your concentration wane as fatigue sets in? Ask yourself, would you drive for over three hours without a break? After several hours with no pause there is a good chance your brain will start to drift. I suggest not fighting this and see it as an opportunity to take a couple of minutes off every hour. Do you speed up as the exam goes on? The next time you hear an invigilator announce, “You have one hour remaining”, notice the trap other candidates fall into as the scribbles around you become frantic. Do not make an adjustment to your speed on hearing this, try to maintain a constant as best as you can. Watching my speed took practise; many times I submitted a script that started neat and presentable and finished rushed. Get used to a pace and tailor it to the structure of the examination. Are you always running out of page space and line spaces? In reporting papers that required pro forma layouts I was forever running out of lines to stick in a balance sheet or having to take the bottom bit of a statement overleaf. This drove me to distraction because at work I wouldn’t dream of doing anything so shabby! The main thing that helped me with this was my choice of stationery. I stopped using those free blank A4 pads colleges give out in favour of something that represented what I would be given in the exam hall. If this means you going out and obtaining a specimen answer book, believe me, it is worth it, because throughout question practise you will be getting into the habit of making life easy for you – and, of course, the marker? Are you absorbing what your lecturer says or are you just focused on the notes they are making on their tablet? This will not be for everyone but consider the number of hours you spend in a lecture room with tutors who are the world experts on the paper you are about to sit. It is a woolly term but try to think of them in a holistic way and beyond the subject matter they are teaching you. What is the first thing they do when they approach a question? What good habits do they have when tackling tough subject matter? Are they repeating themselves and driving you crazy? If they are then this is deliberate, and the more of these techniques you can pick up either consciously or otherwise can only be a good thing.
DON’T BE A
THIS ARTICLE is intended not for highfliers but for the student who works very hard indeed to achieve a pass – that was me. Many of you will pass by sheer tenacity, grafting hard for those extra marks. I qualified by making the best of what I had, and ensured that I performed on the day. I used a few ‘home-made’ techniques – here they are. Do you get in a muddle the day before an exam? Think about resting up the day before an exam. Your brain will have absorbed your mnemonics and exam techniques and will not be taking in new data because pre-exam nerves will simply stop the stream of data in its tracks. A brain on ‘red alert’ is irritable, irrational and not interested in knowledge. A good revision plan should have meant there were no gaps or surprises but if you do find a small area you missed there is a danger you will cram it in, to the detriment of all of your structured work in the weeks before. Use this day for gentle reflection. Do you feel like just not showing up on the day? A number of times I felt like not turning up for an exam because I had convinced myself I would open the paper and have to sit quietly for three hours, unable to answer any of the questions. In the 11 papers I sat this never
Mathew Dawson offers a personal perspective on what helped get him through his accountancy exams
happened. It is amazing how your mind adjusts when something is unavoidable and there is no distraction – something inside told me to get cracking. Do your nerves hit a crescendo in the last minutes before you are called into the exam hall? If you see anyone you know at the exam run away – no good will come out of conversation. The chances are they aren’t your real friends, so don’t worry about hurting their feelings! Crucially, avoid people gathered around one of those pocket books, quizzing each other. Should you stumble on this put your fingers in your ears, start singing loudly and leave the room. Has your stamina caused problems? My final exam was a financial reporting paper with unparalleled time pressure. I failed it by a couple of marks because I flagged before the end. To improve my stamina I did something unusual and devised two four-hour mocks from past paper questions. While this was about as much fun as root canal treatment it did work in that a three-hour paper was suddenly not so daunting. A word of warning though: this needs
• Mathew Dawson is a principal accountant at Warwickshire County Council spring 2013
When the going gets tough... You need to be resilient to thrive in today’s highpressured work environment. CIPFA’s Manj Kalar outlines how you can develop this important characteristic
THE PUBLIC SECTOR is an uncomfortable place to be working at the moment: no pay rise for years, higher pension contributions, more work, fewer people to share the burden – and the signs are that it is going to continue. And that’s before we read all the negative press coverage! Working in this environment is tough, no doubt about it. However, it is possible to not only survive but positively thrive. There are people who walk around seemingly unscathed by disasters that unfold; so what characteristics do they have that they remain untouched by all the changes the rest of us are experiencing? In short, they have developed personal resilience. But don’t fear, this is not a secret shared with a select few – all of us can acquire this. In today’s ever-changing environment we all need the skills to be able to bounce back after all that life has to offer. So what are these? And more importantly, how do you get them? A resilient person has seven attributes: • Emotional regulation – you won’t see them lose their rag. • Impulse control – linked to the above they will not act on impulse. • Optimism – they tend to be naturally optimistic and look on any change as positive, seeking to identify the opportunities created. • Causal analysis – they are likely to have a greater awareness of why things are happening and not take this personally. If the division is shut down and they are made redundant, they will rationally accept the reason, not seeing it as a reflection on their ability. • Empathy – they are empathetic, able to understand what others are experiencing and where they are on the change curve. spring 2013
working. As Einstein said: “Insanity is • Self-efficacing. doing the same thing over and over • Able to use their networks to reach again and expecting different results.” out. 6. Try to understand your own But these characteristics can be experiences We are all shaped by our yours too. Follow these top 10 tips: experiences. How we replay these in 1. Develop connections/supportive our minds will impact on our thinking relationships Remember the old today. So it is worth reflecting on the adage, a problem shared is a problem past to help us understand our reaction halved? A resilient person will have a network of people to help them • Manj Kalar is Technical to what is happening today. 7. Develop a positive view about understand what is happening and see Manager – Central Government and yourself This is really important. Many things from a different perspective. Financial Management, of us walk around with a fairground 2. Accept some crises/change is CIPFA ‘house of mirrors’ view of ourselves. As outside our control We are all difficult as it is, give yourself a break. Develop a mortals, although one wonders with some positive view of yourself; there are plenty of people. Accept that not everything is in your people putting us down, without the inner voice sphere of influence; change will happen. adding to the critics. Remember you have a choice as to how you 8. Try to take a longer-term perspective react to change. So choose what will upset you When something terrible happens, for instance and how you will react. redundancy, take the long view and put it into 3. Accept that change is part of life Change perspective. It may seem devastating now, but it is the only constant. Once we embrace this may lead to new opportunities such as working concept life becomes a whole lot easier. part time, a career change or following your Resistance is futile, so why waste precious dream to be your own boss. So when things energy trying to cling on to the past; move happen, try to move past the immediate impact forward and embrace the changes. 4. Set some realistic goals Change provides an and think longer term. 9. Stay hopeful and optimistic Changing your opportunity to reflect and re-establish what is outlook will reap huge benefits; people who see important. Setting goals helps in actively the glass half-full always seem to have all the planning and thinking positively for the future. luck. Their positive attitude enables them to view Visualise it and you’ll make it happen. what is happening in a positive light. 5. Be decisive Taking action is a great way to 10. Look after yourself Be kind to yourself and develop resilience. Resilient people are usually look after yourself; work but rest and play too. action-oriented. It often doesn’t matter what You need some down time. Then you’ll be ready you decide to do; taking some action will move for all the challenges and changes promised in you forward. Resilient people are also prepared the huge reform agenda. to try new things if what they’re doing isn’t http://www.thegfp-treasury.org
Gasette quiz extravaganza
The puzzles here are just for fun – and to stretch the old grey matter. But the great Gasette Picture Anagram (below) gives you the chance to win a £25 Marks & Spencer voucher! Odd one out
Which of the numbers is the odd one out?
What number should appear next in this sequence? 309 416 525 636 ?
263 594 331
To the letter When each of the following words is rearranged, one of them can be used to prefix all the others, making six longer words. What are they? OHM FUEL GUIDE NET RITE AFT MIST
Thirsty work In a busy hour a coffee shop sold three times as many Cappuccinos as Espressos. 24 more people had Americano than had Espresso and three less people had Latte than had Americano. 36 people ordered Latte, how many ordered each of the other three coffees?
Playing catch up A coach and a car set off from the same point to travel the same journey. The coach sets off five minutes before the car. If the coach travels at 75km/h and the car travels at 80km/h, how many kilometres from the starting point will the two vehicles draw level?
Do the math Assume you are using a basic calculator and press the numbers in the order shown, replacing each question mark with a mathematical sign. Plus, minus, multiply and divide can each be used once only. In which order should they be used to score 1?
Walk on by A man walks south for 3 miles. Then west for 3 miles, then north for 2 miles, then east for 1 mile, then north for 1 mile In which direction and for how far should he walk to return to his starting point?
Get stuck into our our ever-popular sudoku. Below is the solution to the puzzle that appeared in Gasette 110, Autumn 2012
1 7 9
2 5 6
2 8 5
4 1 3
8 6 1
3 9 2
3 9 2
7 6 4
5 1 3
6 7 8
7 5 4
8 3 1
9 3 8
1 4 7
6 4 7
9 2 5
4 2 6
5 8 9
WIN a £25 M&S
To find the mystery word in our Gasette Picture Anagram simply take the initial letter from the person’s surname and re-arrange to find a nine-letter word (clue: these are important people). You can find the answers to all the puzzles here (except the Gasette Picture Anagram) on the GFP website (www.thegfp-treasury.org). • EMAIL YOUR ANSWERS TO:THEGFP@HMTREASURY.GSI.GOV.UK, BY 30 APRIL 2013
QUIZ answer issue 110 The winner: Martin Veale, Forestry Commission Wales. The answer was ‘CROSSWORD’ – the pictures were of George Cole, Tim Rice, Michelle Obama, Ellie Simmons, Wesley Snipes, Bradley Wiggins, George Orwell, Esther Rantzen, Bob Dylan 30 theGASETTE
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