“At that time, one of the biggest weaknesses within ONS was a distinct lack of accountability for financial performance. Instead of getting bogged down in the minutiae of operational performance, we needed to start with and focus on sound governance, transparency and accountability,” explains Paul.
He adds: “Our first step was to create a strategic plan, benchmarking and addressing the strength of our governance, our team, and to examine whether our financial plans were fully integrated with the business plans and workforce.”
“Leading transformation can be a lonely path to tread,” says Paul, “and therefore I sought verification of the strategic plan with an independent review by CIPFA, the Chartered Institute of Public Finance and Accountancy.” The outcome of the review confirmed several points for Paul and the ONS senior management team.
In 2013, Paul Layland asked CIPFA to apply its Financial Management Model (FM Model) to the ONS and required CIPFA to roll out the FM Model with consultancy support, as well as provide an independent assessment of organisational financial management capability. The results placed ONS in the fourth quartile when compared to other organisations.
Paul resolved to make significant changes, with the critical areas of accountability for financial performance, the setting of a robust financial strategy, forecasting, embedding VfM and strengthening of financial discipline across the organisation taking centre stage.
Into the top quartile
Today it’s a very different picture. ONS now ranks in the top quartile of some 50 organisations. Paul and his team embraced the necessary changes to produce a high level of organisational financial management capability and an exemplar transformation. ONS harnessed the four pillars of the FM Model, namely leadership, people, process and stakeholders.
Paul adds: “We have stuck closely to our strategy. Sure, along the way we’ve had to navigate a few forks in the road, but overall we have stayed the course. The three key elements we needed to address were at times the hardest to implement and required bravery. Firstly, we had to tackle team structures and capabilities. How did we want to shape our workforce? Did we have the right people in place to go beyond our mid-term plan? The answer was no.
“The second point was recognising and accepting that we were in a really bad place and we needed to do something about it. I had only been in the role of finance director for nine months, and challenging the status quo was nerve racking. CIPFA’s independent review gave me the confidence I needed to make significant changes."
Changing behaviours and technology
“The third element was about changing behaviours," Paul continues. "We had to commit to change as a team, and establish trust within ONS that we were doing the right thing. This is not as easy as it sounds, as trust grows over time. We couldn’t just tell the story, we also had to demonstrate it.
“There were painful decisions to make along the way too. These centred around the team. We did not have the skills and capabilities needed to drive transformational change beyond a certain point, and we changed around 25% of our workforce.
“Once the skills, capabilities and strategy were in place our attention turned to technology. We were the first government department in the UK to implement a fully integrated ERP and HCM Oracle Cloud solution. We selected a platform which was future-proof and had a much more user-friendly interface than our old system. It has proved to be a great success, reducing risk of system failure, boosted our use of mobile technology, and forging the way to replace old legacy interfaces and saving money.”
The go-to finance team
“The CIPFA FM Model and review gave us a real focus and action plan with logical steps which we stuck to for three years," Paul says. "Seeking an independent review and guidance lent energy, enthusiasm and confidence to our strategic plan, even when times were tough. Moving from the bottom quartile to the top quartile is a great result.
“We’ve achieved a seat at the table and moved the bar up a notch or two, and so we now have a new challenge on our hands. People trust the finance department and our advice, so this is creating a new pull and demand on the finance team from across the organisation. Our innovative approach to analytics and data is also generating discussion and raising questions, and this is great as it will help people make better decisions.”
The key to transformation
Adept financial management and performance are critical to success. Shifts in the political landscape, budgets, and social behaviours are driving a sea-change within public sector financial management. Today, there is a need for senior decision makers and financial officers to propel transformational change through strong financial management. Maintaining the status quo is no longer acceptable to public appetites, with the public now expecting higher levels of service, interaction and accountability.
A starting point is testing and measuring financial management and performance capabilities. Robust public financial management is critical to the achievement of the aims of the public sector through its role in improving the quality of public service outcomes, operational and strategic decision making, long-term sustainability of public services, building public trust in the performance of the sector, and ensuring the efficient and effective use of public funds.
Capturing the characteristics of world class financial management in many instances requires assistance. The CIPFA Financial Management (FM) model enables users to identify weaknesses and confirm strengths, as well as helping to develop a target driven plan and monitor progress.
Commenting on the success of ONS, Stuart Fair, Senior Consultant, CIPFA Advisory, said: “We’re delighted to see that financial management has been significantly transformed within ONS and substantial improvements have been made to address the critical priority areas highlighted in 2013/14 of accountability for financial performance, the setting of a robust financial strategy, forecasting, embedding VfM and strengthening of financial discipline throughout the organisation. Indeed, some weaker areas identified as development priorities within our earlier assessment have been turned into actual strengths.
“Their remarkable progression highlights a highly commendable response to issues arising within the 2013/14 assessment. ONS is exemplar in the transformation of financial management capability given the extent of improvement achieved over the best part of a three-year period.”
The FM Model has helped over 400 public sector organisations in the UK. Designed to help organisations boost their financial resilience, drive optimal performance and design the conditions needed to create transformational change, the FM Model is an online analytic toolkit which allows decision makers to assess performance and take action. Developed and used by standard setters in public finance and accounting, the FM Model spans the entire spectrum of financial management throughout an organisation addressing financial strategy, audit, financial reporting and stakeholder confidence.
- To find our more about CIPFA's Financial Management (FM) Model visit our FM Model page.