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Out of sight, out of mind over finance woes?

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LGC’s essential daily briefing.

There was a time when council chief executives were almost all lawyers. Then finance directors started to get through to the top jobs, followed by a few service heads and then - with increasing concern about economic development - some councils went for wheeler-dealers who could negotiate investment for major regeneration projects.

Have things swung too far away from chief executive roles being the preserve of lawyers and accountants?

Rob Whiteman, chief executive of the Chartered Institute of Public Finance & Accountancy has raised this point this week, and given who his members are some might say: “He would say that, wouldn’t he”.

But Mr Whiteman had a wider point about what he fears is a sidelining of the entire finance profession, with directors excluded not only from chief posts but not even at the top table.

Worse, this is not just finance being overlooked in favour of sexier professions. It’s finance directors being ignored as bearers of bad news – as though the finance problem would go away from a council’s centre of power if they were not there.

He warned: “The relegation of finance officers is just one of the things that means it’s now easier to avoid being told the truth if a council’s finances are heading in the wrong way.

“I’ve seen a worrying number of finance colleagues who have given pretty tough advice to then seen their job abolished or demoted.”

Appointing deal-makers to chiefs’ post might suit some councils, but Mr Whiteman said they “do also need to be town clerks in the old sense of the term that set strong governance” and allow officers to give councillors unpalatable advice without fear of suffering disadvantage.

And he had a shrewd idea of what cause of a fresh round of bad financial news, at least for top tier councils, warning that the volatility of demands in children’s services could be destabilising.

He said: “Children’s numbers can change quite significantly in quite a short space of time. We could have another five 114 notices in the next six months if children’s services budgets really deteriorated.”

Northamptonshire CC used an s114 notice to announce the financial carnage that finally engulfed it – and government-appointed inspector Max Caller found tiresome warnings of financial trouble had been routinely ignored whether from finance professionals or anyone else.

If Mr Whiteman is right, the future of several of the largest councils could be in doubt, and even if there is no eruption in children’s services spending pressures from adult social care could cause the damage.

It’s perhaps understandable why in such tough times he should sound the alarm over the status and influence of the finance profession in councils – every coal mine needs its canaries.

 

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