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ICAEW Better Government Series: A Modern Finance Ministry

The public sector is a vital part of the UK economy and ICAEW has long advocated for greater transparency and accountability in public sector financial management, reporting and governance.

At the start of 2016, Chancellor George Osborne warned of a “cocktail” of serious threats facing the UK economy. In this context, it is crucial that Whitehall and in particular, HM Treasury, is equipped with the tools to weather any storm which might be on the horizon.

Modern Finance Ministry seeks to promote a debate about how our political leadership can be best supported by modern financial management as it seeks to get the best outcomes for the public finances in challenging times. In it, we raise questions about how greater accountability for public expenditure might be achieved and what reforms will strengthen HM Treasury so that it can play its full role in boosting the UK’s growth and productivity.

In particular, we have asked the following questions:

  • Structure: is there a transparent organisational structure that makes functional responsibilities clear and supports accountability?
  • People: is the right mix of financial and commercial skills available, working in the right ways at the right levels to deliver effective financial management?
  • Processes and systems: are there the tools needed to do the job, robust information systems, reliable management information and effective business processes?

A Modern Finance Ministry should serve to optimise the management of the nation’s resources and be at the core of strategic decision making. Whether it’s eliminating the deficit, managing debt, or delivering the “devolution revolution”, the UK Government should be equipped with the right structure, people, and processes.