§ Mr. Lathamasked the minister of Agriculture, Fisheries and Food whether he will make a statement on the effect on his Department of the financial management initiative.
§ Mr. JoplingThe financial management initiative covers a wide range of reforms to improve management in central Government in support of the Government's commitment to give value for money spent in the public's name. The initiative has built on work already being done in individual departments and its effects are increasingly indistinguishable from those flowing from other improvements in management and steps to improve value for money.
Major developments in MAFF in response to the initiative have included:
- (a) the creation of MINIM, the Ministry's top management system, which provides a basis on which Ministers and senior management review in depth the departments' aims, the objectives of its programmes and the resources used in carrying them out;
- (b) the introduction in 1986, following development work in the Ministry's eastern region, of a system of decentralised budgetary control for running cost expenditure. This system currently covers 75 per cent. of the Ministry's manpower and 60 per cent. of running costs. Increased financial responsibility has been delegated to line managers, thereby encouraging them to make more effective and efficient use of resources. The Ministry's supply estimates have been restructured to bring MAFF's running costs together in a single vote and to show the breakdown by the main organisation units (class IV, vote 5 of the 1987–88 Supply Estimates);
- (c) the creation of a computer-based management accounting information system to produce monthly reports of expenditure by budget item for managers who control budgets.
The introduction of these systems has also been supported in the Ministry by a comprehensive programme of FMI training for staff at all levels.
FMI systems have had a positive effect in clarifying aims, in reviewing priorities, in providing improved data for decision-making and in identifying the scope for improved value for money. Some of these improvements are shown in the material contained in the public expenditure White Paper (Cm. 56). As my hon. Friend is aware, further information is provided in the NAO report 638W of 21 October 1986 on the financial management initiative (HC. 588) and in the evidence given on that report in December 1986 to the Public Accounts Committee by the Ministry's accounting officer (HC. 61-ii). I am satisfied that the initiative is improving the management of the Ministry and thus securing better value for money.