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Why s151 officers are left out of the loop

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The world has changed since the role of the section 151 officer was enshrined in the 1972 Local Government Act but, in the current climate, the council finance director is as important as ever.  

The world has changed since the role of the section 151 officer was enshrined in the 1972 Local Government Act but, in the current climate, the council finance director is as important as ever.

So it is of little surprise that LGC’s revelations about the scale of s151 officers’ isolation from the highest-level decision-making processes have sparked a healthy debate.

Why is such a crucial role not given an obligatory place on the top table?

Finance directors point to the flattening of management structures and the creation of multiple portfolio posts such as ‘director of resources’ for the demotion of the s151 officer.

At some councils, the position has become a technical role while a more senior officer looks after strategic affairs. Notably though, there is no legal requirement for that strategic officer to be a trained accountant, as is stipulated for s151s.

And, most importantly, the 1972 act clearly states that the designated s151 officer is the official with the legal duty for the financial health of the council.

Section 151 of the act says: “…every local authority shall make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has responsibility for the administration of those affairs”. So, if it all goes wrong, legally the s151 is in the line of fire.

Despite this, councils where the s151 officer has a place below board level are standing by their models.

The nub of the argument is that it is not the structure that is important per se, but the access and potential influence that the s151 is able to exert in the council.

This, they argue, can be done without direct reporting to the chief executive or a place on the board.

But the private sector is sceptical. Head of corporate governance at the Institute of Directors, Roger Barker, says that it would be considered “a strange way to operate” if the ultimate responsibility for the financial affairs of a private sector company were not at board level.

Indeed, the local government model stands out as idiosyncratic, even in the public sector.

So where to go from here?  

The Chartered Institute of Public Finance & Accountancy has told councils to put senior finance officers centre stage but its advice only has the status of guidance.

And with the effects of the recession far from over, and the prognosis for funding post-2011 grim, it would seem as good a time as any for councils to incorporate the section 151 duties into a position at the apex of their structure.

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