Surrey failings lead to major restructure
0Surrey County Council is to restructure its finance department in response to a critical review by CIPFA of the authority’s financial management.
The CIPFA review found the council will lack sufficient reserves to meet its expected budget gap in 2019-20 unless it takes immediate action.
It listed a number of criticisms of the council’s financial management and, among measures to improve the situation, has helped the council draw up a plan to restructure the finance department.
A council report said that CIPFA had uncovered a “lack of confidence in the financial estimates and progress reports submitted by the finance service.
“This has arisen due to weaknesses in the underlying performance data that have generated volatility in the estimates presented.”
In addition, it said that the council had failed to meet its budgeted savings in recent years amid a “risk averse culture whereby there is little incentive to challenge existing practices or to raise standards of financial management”.
It also said that a lack of financial discipline across the council meant there was limited accountability among budget holders, leading to a “lack of granularity in a number of the estimated financial pressures”.
CIPFA’s report said that former finance director Sheila Little had developed a strong team bond within the finance function”.
However, it said that the team “lacks sufficient drive” to tackle the authority’s financial issues.
It said: “The team had previously raised concerns on the council’s financial situation, but too much of its focus has been on delivering the traditional finance function.”
CIPFA added that Surrey’s finance team was “too passive in its approach” and that a re-structuring is overdue.
The existing team is “top-heavy and there is insufficient delegation of responsibility to more junior staff”, the report said.
It added that multi-tasking across senior leaders in finance means that there is insufficient focus on raising performance standards.
The restructuring plan involves recruiting additional staff to meet short-term needs, as well as developing a new operating model in consultation with staff.
In August, Surrey appointed Leigh Whitehouse as its interim director of finance to replace Little, who left her post suddenly in July amid growing financial pressure at the authority.
