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The FD blog: Amid budget pain, councils are devaluing their FDs

Even if you are not directly involved in the local government sector, the annual council tax setting period may not have passed you by.

Budget setting for 2011/12 has been particularly eventful. The large-scale programme of government cuts and renewed commitment to council tax constraint has made it a particularly tough year. For the first time in at least 15 years, local authorities have faced a cash cut in central government funding and this has led to budget cutting in a radical fashion.

The effect of this has been similar to the social trauma that occurred when the Thatcher government constrained expenditure and introduced the poll tax some 20 years ago.

We have had protesters at council meetings, police called in to deal with rioters, and council proceedings halted like a throwback to the traumas of the early 1990s. The local authority FD sat at the centre of all this has a statutory responsibility to ensure that the budget is balanced. In the current financial environment this is a burden bearing heavily on us FDs, though it also gives us an opportunity to demonstrate the unique nature of the role and how we can add value.

Ultimately, in my borough, this year’s budget setting was handled in a responsible and professional fashion. The council meeting on 1 March was well managed even despite having to approve £18m of savings out of the net revenue budget of £186m. This is a real credit to members of the council and the supporting officer team. Many of these savings represent a first tranche of a long-term programme of resizing that will occur over the comprehensive spending assessment period. This includes a reduction in the services offered to citizens and more remodelling of our back offices.

I know that in a similar fashion across the country, FDs have been very proactive in making sure budgets balance in the first year of the severe expenditure constraint. It was against this backdrop that I was surprised to hear this week that two FDs in London boroughs would soon be leaving their jobs, and the CFO roles in both cases will reduce in importance within those organisations.

I am firmly of the view that in this current environment, FDs can demonstrate their real worth and need to be at the top table in public sector organisations in driving strategies required to address the issue of the overall public spending deficit. This just doesn’t seem the time to diminish the FD role; I would suggest it needs to be enhanced, supported and celebrated, rather than be downgraded to that of technical support.

Stephen Fitzgerald is director of finance for the London Borough of Hounslow

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