Too often in the current times section 151 officers find themselves outside the inner circle of management. Paul Jones argues this risks undermining governance and financial controls.
A recent poll on Linkedin asked: “What should the most senior financial person in a company be called?”
According to the author, the most senior financial person was simply called head of finance.
Then it became finance director, followed by chief financial officer. For local government you can throw section 151 officer into the mix, but does the title give the substance to fulfil the actual role itself?
Most importantly, rather than title, is where they sit in the hierarchy.
16 September 2021
London Stock Exchange or ONLINE
13th Local Authority Treasurers’ Investment Forum
Room151’s flagship annual conference. Free attendance for local government treasurers and section 151 officers.
Lead sponsor CCLA
Public sector treasurers can register here
Dilution
Good governance and financial control requires the individual to be sat at the board (and in my opinion reporting directly to chief executives) but I have seen this position diluted at so many organisations until they are effectively sitting at a 3rd tier of management.
The financial challenges of the last decade have partially contributed to this. Shared services, commissioning, outsourcing and combining statutory roles have meant that in a number of authorities, the job has become shared or deemed part-time.
In other authorities the role has been demoted down the hierarchy to save money. But in the face of the worst financial crisis to hit local authority finances in recent times, in the shape of Covid-19, finance leaders have proved crucial to leading not only the recovery, but balancing the books to ensure we can bounce back stronger.
I am blessed to have a chief executive and cabinet who have absolute faith in me to make the right decisions but it is unfettered access that is crucial in getting the right decision-making. Concerns have already been raised that section 151 officers operating at lower grades may be less able to bring influence to bear on material decisions, with the risk that they are bullied into giving the “advice” that others need to facilitate an ambition or promise.
The absence of an ability to challenge at the top, brings into question whether the right checks and balances have been applied and whether there is enough division of responsibility.
Both are there to ensure that proper consideration is given to initiatives that come forward.
Safe
Getting the right mindset to deliver on innovation and ambition is evidently required, but most important is for the individual to be able to provide that advice in a way that makes everyone “safe” in their decision making.
A risk aware attitude needs to be applied against diminishing resources but it needs to be applied in order for it to be compliant with legislation and is robust to challenge.
The Local Government Act 2003, section 25, includes a specific duty on the section 151 officer to make a report to the authority when it is considering its annual budget and council tax levels.
The report must deal with the robustness of the estimates and the adequacy of the reserves included within the budget. The act requires a council to have regard to the report in making its decisions at budget and council tax setting meetings. But how many section 151 officers feel confident to write in the their section 25 reports that members must raise council tax; must increase the level of reserves and general balances to ensure financial sustainability; must make difficult choices including cuts to balance the books? Too many I believe have been persuaded to badge these difficult decisions as “savings targets” without clear commitment, or belief, that they will ever be delivered, leading to some of the problems clearly evidenced by the pandemic.
Thriving
The spread of Covid-19 has created a worldwide economic crisis. The events we are living through are in many ways unprecedented, with large-scale quarantines, borders shut, school closures, and social distancing. Strong, steady leadership from the section 151 officers is critical for addressing immediate concerns about safety and survival, stabilizing the business in the near term, and positioning it for recovery.
With councils losing unprecedented levels of income—both from tax revenues and sales fees and charges, not to mention commercial losses from property investments—setting a balanced budget and cash is not just king, it’s critical for survival.
Amid all this uncertainty, the section 151 officer must play a central role, alongside executive peers, in stabilizing the business and positioning it to thrive when conditions improve.
The section 151 officer must be the leader after all, who directly contributes to a council’s financial health and organisational resilience day-to-day.
Perhaps the current environment is a wake up call for the re-emergence of the section 151 officer to sit at the top table with parity to their peers and ensuring financial sustainability is on the horizon.
And what would I like to be called? Personally I don’t care much for a job title as long as I have the resources and ability to do the job without having to compromise when a difficult decision needs to be taken.
Paul Jones is executive director, finance and assets (section 151 officer), at Cheltenham Borough Council.
—————
FREE monthly newsletters
Subscribe to Room151 Newsletters
Room151 Linkedin Community
Join here
Monthly Online Treasury Briefing
Sign up here with a .gov.uk email address
Room151 Webinars
Visit the Room151 channel
