CIPFA has recently published its statement on the Role of the chief financial officer in local government. We are aware that to have real effect, the statement needs to have impact beyond the finance function, particularly if its statement that the chief financial officer (CFO) is a key member of the leadership team is to be endorsed.
It is for this reason that CIPFA has been working closely with SOLACE, and the Society of Local Authority Chief Executives, to give additional weight to the statement.Key to this is a new ‘comply or explain’ requirement of local authorities. The CIPFA statement says: ‘The CFO should be professionally qualified, report directly to the chief executive, and be a member of the leadership team, with a status at least equivalent to other members.’
The statement requires that if different organisational arrangements are adopted, the reasons should be explained publicly in the organisation’s annual governance report, together with how these deliver the same impact.
CIPFA and SOLACE, working together, have published an application note to their Corporate Governance Framework setting out how the comply or explain requirement can be fulfilled within the framework. The application note will apply for two years, on a voluntary basis, pending a full review of the framework itself.
We hope local authorities will embrace the opportunity to publicly demonstrate their arrangements for safeguarding public in adopting the comply or explain principle. We would also encourage all authorities to engage positively when the review of the CIPFA/SOLACE Corporate Governance Framework itself is launched.
Alison Scott is assistant director, local government finance, CIPFA
