More than a fifth of section 151 officers do not report directly to the council chief executive while a similar proportion have been in post for a year or less, sparking concerns their influence is being weakened at a time of unprecedented financial challenge.
LGC’s exclusive research saw us collect information from 147 top-tier councils in response to concerns councils’ leading financial role – which is a requirement of the Local Government Act 1972 – is being downgraded.
The research found all section 151 officers who did not report to the chief executive had been appointed since 2010 with almost two-thirds starting in the role in the past three years, potentially suggesting a growing trend.
The research, conducted during March and April, also found 22% of section 151 officers had been in post for a year or less while 13% were interim or acting up.
The Chartered Institute of Public Finance & Accountancy has repeatedly raised concerns about the issue. However, some council chiefs have defended the arrangement which they argue reflects the modernisation and streamlining of senior management teams.
Cipfa associate director for local government Brian Roberts told LGC chief finance officers needed to sit at the top table and have direct access to the chief executive in order to deliver their statutory responsibilities.
“The findings indicate that there is a significant proportion who don’t and that weakens the statutory responsibility,” he said.
“Most actions have financial implications, be it immediate or long term. The CFO should be in the middle of those discussions, ensuring everybody understands the financial implications.”
He said the high turnover and relatively high number of interims was also a worry, pointing to a recent Cipfa survey which found 60% of finance professionals have come under pressure to act unethically at some point in their career.
“That’s where experience comes into play,” he added.
Gary Fielding, president of the Society of County Treasurers, told LGC the profession had been concerned about the loss of experience for “quite a long time”.
“We have got experience being lost and the job is becoming more challenging and it’s hard for people to make that stretch,” he said.
“If you are reporting into an executive director you can’t access and learn about the levers of power in the same way.”
If you are worth your salt you will have an impact. If you support strategic change then you will earn your right to be at the top table
Of the 32 section 151 officers who did not report into the chief executive, the majority reported to an executive, corporate or strategic director. These councils tended to have a senior management structure in which there are just two or three very senior directors reporting into the chief executive.
Mr Fielding, whose position as corporate director of resources at North Yorkshire CC includes section 151 responsibilities, said while any chief finance officer had to earn respect within their organisation the danger was that not having the finance director at the top table sent the wrong message to officers and members about the importance of finance in the organisation.
“In some councils I suspect as financial issues have come to the fore [as a result of austerity] it is seen as ‘finance has got too big for its boots’… If the [exec team] determine strategy and then you’re invited in and you have financial concerns, then you’re fighting a rear-guard action; you’re in defensive mode and you can then be perceived as being obstructive,” he said.
“The biggest risk is not being there when the ideas are being had and the plans are being formulated.”
Graphs and charts
Many councils where the section 151 officer did not report directly to the chief executive told LGC the 151 officer has a “dotted line” allowing them to report directly to the chief executive on finance matters.
Lynton Green, deputy chief executive and director of corporate services at Warrington BC, told LGC that without that access there was a “risk that financial things get missed” or warnings were ignored.
Mr Green, who was not at the top table when he joined Warrington as section 151 officer in 2010 but was subsequently promoted to it, said: “I’m aware of one or two colleagues where they’re not directly at the top table and I think it’s harder [to get their voice heard].
“There are very well-respected colleagues right around the country where the role has almost been downgraded to make a saving…that’s not really a saving if you haven’t got the right person at the right level in your organisation. There’s a risk a council could end up making a decision that might cost it more in the long run.”
In one recent high-profile case, Cipfa immediate past president Andrew Burns was made redundant after Staffordshire CC eliminated the role of director of finance and resources last December. A new section 151 officer was appointed with the title of chief accountant on just over £90,000, £40,000 less than Mr Burns, and reporting to a new director of corporate services role.
The average salary for section 151 officers who report into the chief executive was £122,352, 20% more than the average for section 151 officers who do not.
However, LGC’s research suggests even those section 151 officers who report to the chief executive are often paid less than the council’s most senior directors.
Cumbria CC chief executive Katherine Fairclough, the deputy spokesperson on finance issues for the Society of Local Authority Chief Executives & Senior Managers, told LGC this was more than a pay issue.
She said: “Over the past 10 years I have seen section 151 officers retain their status as a specialist senior officer and professional but they’re not one of the high paid executive directors in an organisation any more.
“For me there is power and influence in a statutory officer role… The chief executive, 151 and monitoring officer have to have a really effective working relationship, they are critical for the effective running of the council.”
Ms Fairclough pointed out that 10 years ago it was controversial not to have a qualified social worker as director of social care but that was now an accepted arrangement.
She added: “My section 151 reports to me. They are part of the corporate management team and operate absolutely appropriately but they are not an executive director. That can and does work well.”
Not all section 151 officers agree on the importance of being at the top table. Eugene Walker, executive director of resources at Sheffield City Council, told LGC some finance directors placed too much emphasis on their status within the hierarchy.
He said: “If you are worth your salt you will have an impact. If you support strategic change then you will earn your right to be at the top table.”
Catherine Staite, emeritus professor of public management at the University of Birmingham, told LGC the trend for reorganising top teams in this way began in 2010 when the advent of austerity prompted a “lot of slimming down of top teams”.
Ms Staite said this style of ‘matrix management’, where an individual was line managed in one part of an organisation but worked across it, was becoming more common in all kinds of organisations. She stressed putting someone at the top table didn’t automatically give them influence.
She said the “caricature of the obstructive chief financial officer” no longer existed.
“I don’t think anybody like that could have survived into this modern era,” she said.
“It’s not necessarily about seniority but being effective and creative… the people who build that sort of reputation for themselves will automatically be involved, rather than through a dictat that says you must engage with me.
“I think that’s the future: to move away from the old paradigm of seniority being conferred by your position in the hierarchy.”
The majority of data was obtained through FOI with some supplementary LGC research
Hover over interactive graphs and charts for full details
In Detail: Section 151 officer salaries
In Detail: Reporting lines
In Detail: Section 151 officer tenure
In Detail: Employment status