CFOs must not be side-lined


by Rob Whiteman, CIPFA CEO

There’s no two ways about it – the findings from the Local Government Chronicle that a fifth of lead finance officers do not report directly to their council’s chief executive are a cause for concern. 

The Section 151 Officer occupies a critical position in local government holding the financial reins of the business and ensuring that resources are used wisely to secure the best outcomes for communities. Their responsibilities to achieve value for money and provide prudent financial advice are a statutory obligation for local authorities.

However, the LGC’s findings indicate that nearly a quarter of Section 151 Officers are not reporting directly to their chief executives. There are an unsettlingly high number of individuals occupying these critical roles who have been in post for between only one and three years, indicating high levels of turnover in a role that thrives on depth of institutional knowledge that can only be gained over time.

CIPFA’s statement on the role of the CFO in local government outlines that, in order to provide adequate advice and assurance to their organisations, the Chief Financial Officer in a public service organisation must: 

  • be a key member of the leadership team, helping it to develop and implement strategy and to resource and deliver the organisation’s strategic objectives sustainably and in the public interest
  • be actively involved in, and able to bring influence to bear on, all material business decisions to ensure immediate and longer term implications, opportunities and risks are fully considered, and alignment with the organisation’s financial strategy
  • lead the promotion and delivery by the whole organisation of good financial management so that public money is safeguarded at all times and used appropriately, economically, efficiently and effectively
  • be professionally qualified and suitably experienced.

While the data must be viewed in the broader context of other research that’s been undertaken in this area – the National Audit Office found that 89% of CFOs were members of the senior leadership team, even where they didn’t report direct to the chief executive – any evidence suggesting that Section 151 Officers are being excluded from the top table within local authorities is a matter of concern for CIPFA.

It also raises troubling questions around the future of the profession – high turnover does not indicate a desirable and in-demand job role. To ensure that the position is attractive to suitably qualified and experienced applicants, candidates need to feel their advice plays an important part in decision making, and is taken seriously.

CIPFA would strongly urge all local authorities to ensure that their Section 151 Officer has a seat at the top table – including reporting lines into the chief executive. This is crucial to ensure they are sufficiently supported to fulfil their duties, and to ensure that local authorities have access to effective financial advice at the highest level at a time when it is sorely needed.

This article first appeared in LGC.

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