The Autumn Statement was a wake-up call to many regarding the state of the public deficit. With Government finances forecast to be £122bn worse off in the period until 2021 than forecast in March’s Budget, the new Chancellor had little choice but to break the fiscal rule in record time. As we all know, a business needs a robust and financially sound plan to get finances into the black and when the BBC’s Laura Kuenssberg stated that Philip Hammond sees himself as a CFO looking after a finance department, I was delighted. But does this view of finance professionals emanate within the rest of Whitehall?
For many years, ICAEW has been highlighting the importance of having trained accountancy experts within Government. Publications such as CFO at the Cabinet Table and A Modern Finance Ministry had been well received and were followed with various meetings with Whitehall personnel who agreed with our views. That is that political leadership can best be supported by modern financial management as it seeks to get the best outcomes for the public finances in challenging times. This includes the right mix of financial and commercial skills available, working in the right ways at the right levels. This would give greater accountability for public expenditure and help Government act more like a business.
Instead we continue to hear of the exodus from Government of qualified senior finance professionals. Even more worryingly, we understand that policy skills are now deemed far more important than professional skills for senior finance roles. Finance professionals are not being considered for more senior roles and there has been a substantial fall in those studying for accountancy and financial management qualifications. If it t is no longer necessary to be an accountant or understand finance to occupy a senior finance role in Government, there is real danger that figures such as £122bn worse off will become the norm in the future.
For the third year running, ICAEW is contributing to the IFS Green Budget, which will be published by the Institute of Fiscal Studies in February and inform much of the debate in the run up to the Chancellor's first Budget. Find out more here.