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A shake-up at the Centre

posted 21 Aug 2015, 20:48 by Peter Webb   [ updated 1 Nov 2015, 11:29 ]

How often do we see headlines telling of “the biggest shake-up in a generation” inflicted by government on some institution or service ? Well now the tables are turning: government itself is getting under way with its own long overdue shake-up. Recall that in 2013 the First Lord of the Treasury was asked  by letter via my MP Who will mend UK Government ?  I can now report developments in the form of a remarkable and unexpected NAO report about the Centre of Government (Cabinet and Treasury) telling of tectonic shift under Westminster and Whitehall.

 The issues raised with the C&AG (Comptroller & Auditor General – NAO National Audit Office) were summarised in the 5th June STAG UPDATE as follows it having been first suggested that the NAO (and PAC) themed investigations into Value for Money  hugely miss the point compared with system effectiveness, financial literacy and decision alacrity:

·         The NAO does not seem to have access at cabinet level.
·        There is no conventional unified financial system excepting late coming WGA(Whole Government Accounts – see below) because the Treasury has not had the knowhow and  desire to build one. Parliament has been slow to 'insist' possibly because of 'fear' of the Chancellor.
·       This deficiency sets a very poor example down the line and is behind the non-observance of standard practice in accounting to the people who have the universal franchise and bear the entire burden of widespread taxation and the risk consequences of insolvency (cf Greece).
·        The poor situation has been further exposed in the run up to the general election as it became clearer that we are rightly concerned about the deficit and debt, and spending 'regardless'.
·        That deficit and debt has been compromised because management focus is confined to the cash flow timing with unrestrained borrowing (PSBR – Public Sector Borrowing Requirement) as opposed to  the true expenditure deficit and financial dynamics of balance sheet and budgetary control.
·        This  in its turn reveals that there is no clear and transparent financial scheme for devolvement (and the belief that the meaningless 'austerity' is an option). This is relevant to all aspects eg 'northern powerhouses', possible Scottish autonomy, city mayoralties. And there is 'common parlance' reference to "local people" involvement which in reality stops at councillors  - who do not account to local people.
·        A separate question was answered,  over former Treasury First Secretary Danny Alexander's signature, concerning the OBR and its filling a vacuum in the Treasury. It did in effect state that the 'independence'  was  to allow for the fact that Ministers could not be trusted with forecasts.
·        A further separate question to Vince Cable referring back to earlier correspondence on local funding method and lack of LEP (Local Enterprise Partnership) accountability was directly but incorrectly answered before he too fell at the election.

 The Centre of government: the NAO’s  update overview of March 2015 is here  Comments are:

· I     It says“the centre’s role has evolved in response to austerity”. That is a strange attribution when austerity, like value for money, is a subjectively felt condition not a policy. Rather the role is having to evolve under pressure of the uncontrolled and incorrectly defined deficit in need of the financial system being built.
·        References to the limited formal powers of the new Civil service Chief Executive from the private sector, John Manzoni, are revealing but muted (paragraphs 9-12). One can’t help wondering if there may be a titanic cultural clash, in the sense of new wine in an old bottle, between Mr Manzoni and Head of the Civil Service (and Cabinet Secretary) Sir Jeremy Heywood. There is obviously no hint of this except possibly in paragraph 12.
·        It is highly significant too  that the recently appointed  Treasury Director General of Spending and accountant  Julian Kelly now has the role of Chief Financial Officer to “move finance in government towards the ‘strategic business partner’ role it has in the private sector. The “partner” word will sound strange to those of us from the business and industrial sector.  In fact all the  references to CEO Manzoni’s work on “cross-government” development anticipate  private sector objective-led structures which are naturally hierarchical for direction and reporting with general and specialist function teams – finance, production, research, marketing, HR and so on – organizationally integrated.
·        The headings  “Deeper change is needed in the next Parliament” and the need for “clearer and more effective leadership from the centre” recognise the depth of the problem to be fixed. 
·        Presumably ‘Civil Service Reform’ as earlier spoken of by House of Commons Select Committee as a dire need will now evolve with that of “the Centre” in ways yet to manifest themselves.