A favourable variance: CIMA's chief executive, Charles Tilley, recently addressed HM Treasury's advisers' conference in his capacity as chairman of its best-practice advisory panel on financial management, In the following edited extracts of his presentation he proposes a change of culture throughout Whitehall and explains how it can be achieved.

AuthorTilley, Charles
PositionChartered Institute of Management Accountants - Conference news - Column

[ILLUSTRATION OMITTED]

In his first, brief speech as prime minister on the steps of 10 Downing Street, Gordon Brown used the word "change" eight times. As ministerial appointments and departmental reorganisations ensued, structural change was certainly swift in coming. I hope that his arrival will also mean a change to how the government goes about its business. Because what doesn't change is the need for it to continue on its journey towards being better at using the public's taxes effectively and efficiently.

For this to occur, world-class financial and performance management has to be central to how the country is run. We must put "managing by numbers" and a focus on outcomes into the minds of everyone who works in government, not only those with a specific responsibility for finance. All this needs a change of culture and clear ownership from those leading it.

Under the comprehensive spending review, central government departments have been asked to find efficiency savings of three per cent year on year, releasing 26bn [pounds sterling] by 2010-11. To be sustainable, the efficiencies must result from reforms to improve performance. Cutting costs alone will not be enough.

The culture of government needs financial management--or, as I prefer to call it, performance management--at its heart. The purpose is to manage government departments effectively to achieve the outcomes (not outputs, which aren't the same thing) that are necessary.

Focusing on outcomes is not easy for any organisation. In business, developing strategy is relatively simple; delivering outcomes from that strategy is much harder. The same is true in government, but it's further complicated by the challenges of satisfying a huge number of stakeholders, securing adequate resources and, of course, dealing with the politics. In business, all actions are taken with a view to increasing shareholder value. For government, the ultimate goal is "a better Britain", although this is clearly harder to define.

Take the recent ban on smoking in public buildings as an example of the challenge of choosing and achieving the right outcomes. The intended outcome here is, of course, to improve the nation's health. But will that be the outcome and what other effects will the ban have? Before it took effect, I jokingly predicted that the country's pubs would install so many patio heaters as to accelerate global warming. On July 1, the first day of the ban, I visited a pub that had just...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT