Strong financial management is critical to enabling government to steer the best course through the challenges it is facing, the National Audit Office (NAO) says.
It is also essential to enable departments to make better spending decisions and deliver value for taxpayers, it added.
In a new report published today, the NAO examines how the Government Finance Function (GFF) is setting itself up to deliver its 2030 Strategy. The strategy aims to put finance at the heart of decision-making across government.
The GFF is the cross-government network of around 9,000 civil servants integral to improving financial management across government departments, and arm's-length bodies. Its strategy sets out the ambition to strengthen finance capability, improve the use of data and insight, and make finance professionals more embedded in delivering public services, which will help support better outcomes.
While the strategy itself does not have a specific savings target, the report comes as departments face pressure to deliver nearly £14 billion in efficiency savings by 2028-29. The NAO has carried out its first review of the strategy implementation, to provide an independent early assessment of progress, and help identify challenges and opportunities to maximise the impact of the strategy.
The NAO found positive engagement across Whitehall, with 90% of departments rated “good” or “excellent” for their finance teams’ engagement with the GFF in 2024–25.
Looking ahead, the NAO identifies significant opportunities for the finance profession to have greater influence across government:
- Artificial intelligence – AI is a major opportunity to transform financial management across government. AI and automation could reduce administrative finance tasks, freeing up resources to improve analysis and strengthen financial insight – overall helping better management of department budgets.
- Reforms to spending controls – although in its early stages, HM Treasury’s new reforms will give departments more responsibility for their finances. This allows finance teams to take a front seat and better influence how financial decisions are made, supporting better value for money.
However, the report finds there are still some long-standing challenges the government must overcome – outdated systems and poor-quality cost data make it harder to take full advantage of AI and to track potential savings.
The NAO concludes that the GFF has laid out a clear ambition to strengthen financial management across government and has established many of the foundations needed to succeed. Now the watchdog recommends that the GFF should look at how its work could go beyond impacting just finance teams and set out clearly how it will work across government to truly have influence with senior leaders, HR teams and budget holders.
The NAO will continue to work closely with the Government Finance Function and wider government to support improvements in financial management.
The NAO has also previously published a range of insights and guidance to help government strengthen financial decision-making, improve resource allocation and achieve better value for money:
- A planning and spending framework that enables long-term value for money
- Financial management in government: allocating resources
Gareth Davies, head of the NAO, said:
“As government responds to significant pressures on public spending and public services, strong financial management will be critical to helping departments make better decisions, improve productivity and deliver better value for taxpayers.
“The Government Finance Function has created strong foundations and must continue to build on these. We will work with the function and wider government to share insights, identify good practice and support efforts to strengthen financial management across the public sector.”
