Financial Management Reform programme

CIPFA Central Government Finance Conference

13th October 2015

David Allen

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HMG Finance & the Financial Management Reform programme

PROTECTING VALUE

DRIVING VALUE

ADDING VALUE

For more information, please email [email protected]

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Our team:

Our numbers:

Our stake-

holders:

The scale and position of HMG Finance makes it a unique place to work.

The finance function is at the heart of decision making in HMG – protecting, driving and adding value for taxpayers.

This is more important than ever given the fiscal context.

The HMG Finance function comprises around

14,500 colleagues* across 46 departments and the Devolved Administrations.

Responsible for over £700 billion expenditure a year, managing over £1,300 billion of assets and £3,100

billion of liabilities.

We are accountable to both the public and Parliament and Ministers and HMG decision makers.

OUR ROLE

For more information, please email [email protected] * Circa 9,500 FTE excluding Devolved Administrations

Following the 2013 Review, the cross-HMG Financial Management Reform (FMR) programme was designed to take forward the recommendations.

Focus on Financial Reporting and professionalisation Focus on Financial Management and putting

finance at the heart of decision making

1982

2001

2011

2013 and on…

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Government Accountancy Service set up

Resource Accounting and Budgeting Bill

First Whole of Government Accounts published

The right people with the right skills in the

right place

A more strategic, efficient and influential

Finance Function

Tools and frameworks for better financial decision-making

Relevant, high-quality and timely

management information

FINANCE OPERATING MODEL COMMITTEE

PEOPLE COMMITTEE

DATA & ANALYTICS COMMITTEE

PLANNING & PERFORMANCE COMMITTEE

David Williams

(DH)

Ann Beasley (MoJ)

Howard Orme (BIS)

Mike Driver (DWP)

The cross-HMG FMR programme – led by four Committees

Review of Financial Management in HMG led

to the FMR programme


“What makes a good FD” model Moved 10 Finance Directors into critical posts Future Leaders programme First intake of 30 Finance Apprentices First intake of 50 Finance Fast Streamers Government Finance Insight Seminars at IfG

PEOPLE

In the year since the Committees were launched (June 2014), the FMR programme has achieved a great deal.

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FINANCE OPERATING MODEL

Capability & Risk assessments for 10 departments Tax Centre of Excellence servicing 3 departments 19 Knowledge Networks established Cross-departmental agreement to move to a

collaborative Finance Operating Model

DATA & ANALYTICS

Engaged with PermSecs and FDs on MI issues Building Blocks framework created Benchmarking guidance launched Helped shape new CIMA principles “Data sprints” – 3 completed, 3 in progress.

PLANNING & PERFORMANCE

1% forecasting accuracy benchmark (~£2bn forecast reduction in 2014/15)

Seven costing projects (£45bn of TME) Value maps for 15 depts. Prototype “Day 1 Finance Pack” Contributed to SR15 guidance and templates


PEOPLE COMMITTEE

Team in DH

FINANCE OPERATING MODEL

COMMITTEE Team in MoJ

DATA & ANALYTICS COMMITTEE

Team in HMT

PLANNING & PERFORMANCE

COMMITTEE Team in HMT

Priority: Develop a Target Operating Model for HMG

Finance Function

The TOM project will include setting up

Centres of Excellence (e.g. tax) servicing a

number of depts. and will identify how

Finance can effectively use Shared Services.

Priority: Establish new joint HMT-CO

Management Information & Analytics team

The MI team will

ensure that the data Central Government

collects from depts. on a routine data can, and is, used to drive

performance and VfM in HMG spend

Priority: Costing

Costing projects review efficiency and

effectiveness of current HMG spend in cross-cutting areas, by using an input-output-outcome framework and analysing cost

drivers to inform dept. policy development.

Priority: Setting up a Finance Academy

Academy will offer a

variety of courses (through different

mediums) to help all in Function have skills

required to ensure Finance at heart of decision making.

Initially the Academy will focus on 5 areas

agreed by FLG.

In 2015/16, we will build on this progress, with a particular focus on four priority areas. A key milestone is the January 2016 conference.

5 For more information, please email [email protected]

A Finance Academy that provides a strong development offer for all in Finance, building financial capability and driving continuous improvement.

Priority focus for the People Committee:

Finance Academy

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By January 2016 Conference: Launch first stage of Finance Academy, focussing on five or six courses in priority areas

(agreed by FLG) – likely to be Finance Business Partnering, Forecasting, Commercial Skills and Business Case drafting.

Long-term aim: Academy available for all in Finance, plus courses for non-finance staff

To date: Team of 8 FTE in place, led by Sam Foley (Director), to design Academy

Priority


Next steps 1. Mapping out current L&D landscape and assessing quality 2. Gap analysis of priority areas to improve training 3. For each dept., expand best courses & identify training needs

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Design a new model for organising the circa

HMG finance function,

with the objective of increasing efficiency and

shifting a greater share of our resource to

activity that supports insight

and strategic decision making.

Ambition for TOM

Analyse Finance survey results (received in Sept 2015) to build a more granular understanding of the structure of the Function.

Step 1

Step 2 Small team (in MoJ) to develop a more detailed business case, including design of TOM and implementation plan, for the Finance Leadership Group by the end of 2015.

Finance leadership supports this objective.

The TOM team is now designing a more detailed business case….

Finance Operating Model Committee priority:

Target Operating Model


Priority

Data & Analytics Committee priority:

HMT-CO Management Information (MI) team

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By January 2016, we will have…

Set up the MI team

Defined the MI requirements for HMG

Undertaken “data sprints”

Mapped out a long term road map to deliver our data strategy

A new HMT-CO MI team will review the current Management Information landscape across HMG (both demand and supply of data and MI) and identify where improvements can be made to

ensure Ministers and senior official have access to relevant, high quality and timely MI.


3 to 6 week deep dives to explore complex data sets and identify quality and process

improvement opportunities

Priority

Planning & Performance Committee priority:

Costing projects: Examples to date

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Health & Social Care

• Full baseline to include NHS, social care, social care benefits, 3rd sector

• Detailed cost splits by input category and output

• Quantified non-HMG funded care (£2bn)

• Deep dived into Homecare and Urgent and Emergency Care

Further Education (FE)

• First ever comprehensive bottom-up costing of over 1,200 FE providers

• Fully linked initial formula-based funding through to educational outcomes

• Work was underpinned by visits to and analysis of 20 FE providers

Departures & Removals

• Quantified full system spend on removals

• Assessed unit cost of each removal pathway

• Marginal investment analysis of best VfM for each new £1m spent

• Quantified cost/benefit of alternative interventions2

HMG at the Border

• First ever review of all multi-agency activity/spend at the UK Border

• All spend assigned to inputs/outputs/outcomes

• Conducted deep dives into Felixstowe, Gatwick intelligence activity and the Istanbul to Heathrow air passenger route

£900m £2bn1

£10bn £581m

Mental Health (MH)

• Full baseline to include NHS MH services, other MH-relevant NHS spend, other govt services spend on MH and non-govt spend

• Identify unit costs of services and understand cost drivers

• Deep dives on secure services, impact of MH on physical care (focus on type 2 diabetes), and MH and employment

£19bn

• Full baseline from police, to courts, prisons and probation

• Look at spend by activity, cost type and front/middle/back office to identify inefficiencies across multi-agency model

• Deep dives into re-offending and domestic abuse

Criminal Justice in London £3.5bn

1. Two health economies only: North East Lincolnshire and Cornwall. 2. Nudge, faith-based surgeries, data matching with other departmental databases 3. Immigration Compliance & Enforcement


Priority

Culture eats strategy for breakfast How colleagues can be involved…

10 For more information on any of these opportunities, please email [email protected]

FMR workstream How you and your team can be involved…

Finance Academy Tell us about good L&D programmes and training you have been on recently and areas of the learning offer you think Government Finance needs to invest in.

What makes a good FD

Look at our “What makes a good Finance Director” model, endorsed by the Finance Leadership Group. This provides a framework for further work on career pathways. Take a look at the model and think about what this means for your development.

Knowledge Networks

Join an existing Knowledge Network, or set up a new Knowledge Network.

Forecasting toolkit Read our forecasting best practice “toolkit”, including a short guide on the principles of good forecasting, a prioritisation guide to help forecast producers assess their risks and a challenge guide for decision makers.

FOM

P

& P

Pe

op

le

Culture eats strategy for breakfast How colleagues can be involved…

11 For more information on any of these opportunities, please email [email protected]

FMR workstream Events you can join…

Peo

ple

Government Finance Insight seminars

In collaboration with the Institute for Government, we are putting on a series of talks to bring together a diverse set of speakers and debate key issues of interest to Finance.

• Friday, 20 November | 16:30 – 18:00 | Danny Werfel, former Controller of the (US) Office for

Management and Budget, and Michelle d’Auray, Canadian OECD Ambassador, will discuss the pitfalls of financial standardisation in the American and Canadian contexts.

• Tuesday, 15 December | 17:30 – 19:00 | Margherita Della Valle, Group Financial Controller at Vodafone, and Brian Gilvary, Chief Financial Officer at BP, will share their perspectives on the Financial Management Review Board and their own experiences as senior finance professionals in major companies.

• Monday, 18 January | 17:30 – 19:00 | Manoj Juneja, Chief Financial Officer of the World Food Programme, will talk about financial innovation as a catalyst for change from an international perspective.

P&

P

Costing projects seminar series

Come along to hear about the costing projects completed to date and how tools developed might apply to your work.

• Thursday 29 October (12:00 – 13:00) – UK Border, HM Treasury • Tuesday 24 November (13:00 – 14:00) – Criminal Justice in London, HM Treasury • Monday 14 December (13:00 – 14:00) – Mental Health, HM Treasury

Government Finance and Internal Audit Event 2016

On 28th & 29th January 2016, we will be holding our annual CPD training event in Birmingham, including showcasing the latest FMR progress and outputs.

For more information or to book your place, please visit https://registration.livegroup.co.uk/govfinanceiaevent/

https://registration.livegroup.co.uk/govfinanceiaevent/

Financial Management Reform programme

Documents

Transcript of Financial Management Reform programme