A golden hour for finance directors?

In a seminal work (dictionary defines as “Highly influential in an original way”) in the mid 1980’s I traced the development of the powers and influence of the Chief Financial officer in Local Government from 1601 to date. The thesis was around showing that the heyday of financial management and decision making had been passed some decades ago and that having started from the position of book keeper the post was rapidly returning that way as central regulation removed all scope for creative thinking.

The work was read by at least 4 people (me, my tutor, my examiner and my long suffering PA who produced the work on a steam age word processor).

It is interesting to consider what the sequel would have to say about the role today.

The answer is that each age brings the need for new and different skills. The 1980’s and 1990’s were the age of creative accounting. The art of making much out of little. To some extent this has been ruined by International Accounting Standards. Accounting Standards are, of course a modern invention and have made life far more complicated and taken all the fun and skill out of basic accountancy. This is now compounded by the need to standardise to the extent that a whole Government account is possible. I regret that such possibilities do not actually raise a flicker of excitement in me. They are meaningless and time consuming concepts which will be lucky to attract 4 readers.

The art of being a Director of Finance, and it is an art not a science, is of achieving the impossible with very little indeed. Our forebears certainly between 1895 and 1939 were left largely to their own devices to organise the stewardship of public funds and to be innovative and creative with them. It was a golden period and some local authorities (Birmingham is the one always cited but there were others) innovated in a way not seen before or since. Largely free from the minutiae of Central Government control.

In a different way this time could be another golden hour. There is a need for someone to keep steady when there is panic all around. Someone who can pretend to have vision when there is nothing to see and can continue to keep the show on the road despite twists and turns of policy and a general feeling of doom as resources continue to reduce until 2020 and beyond.

I spoke in my last effort of the uncertainty that blights us making Medium Term Financial Plans statements of faith rather than actuality and that has continued even as I write.

The settlement this year has to await the Autumn Statement which stretching global warming to its limits will be in the second week of December. This means a Christmas Eve settlement. I guess that for most they will have discounted all rumours and be pretty sure of their figures anyway but there are always one or two surprises.

The unusual options given authorities on Council Tax increases will be exercising some minds and the frankly bizarre statement around support for Council Tax Benefit limitation coming after the conclusion of public consultation but before final regulation is another interesting twist. The fact that these subventions seem to be coming as part of the total settlement and therefore it will be impossible to be certain what you are getting adds even more interest. I guess the news of the postponement of business rate revaluation will excite the valuers rather than the accountants as the effects of this are difficult to judge in any case.

One of my other strongly held views is that all Section 151 Officers should read Machiavelli, currently available free on your Kindle and well worth a read at times of trouble.

Richard Harbord is chief executive of Boston Borough Council