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Financial Management Initiative

Volume 114: debated on Tuesday 7 April 1987

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asked the Paymaster General whether he will make a statement on the effect on his Department of the financial management initiative.

The financial management initiative (FM I) covers a wide range of reforms aimed at improving financial management. It is integral to our efforts to secure improved value for money generally.Within my Department introduction of the FMI has been given top priority by senior management. Managers at all levels now have responsibility for setting and reviewing running costs budgets and where relevant for programme budgets. Increasing use is being made in budgeting and planning of challenging but realistic value for money targets and measurement of output and performance. Top management regularly reviews the performance of all parts of my Department.Some of these improvements can be seen in the targets, output and performance measures and value for money savings in the public expenditure White Paper (Cm. 56); the second report of the Treasury-Cabinet Office joint management unit (JMU) on the implementation of the efficiency unit's report on consultancy, inspection and review services in Government departments and the JMU's progress report on action following the multi-departmental review of budgeting.Other major examples of better management contributing to improvements in value for money are TRES, a two-year programme for introducing computer terminals for improving and making more cost-effective the payment of unemployment benefit and work on benefit inquiries, which will be completed at the end of this year, achieving over 1,900 staff savings worth some £1 5 million a year. These savings should cover the costs of the programme within about four years. The 1986 efficiency scrutiny on value for money in the community programme—which has a programme budget of about £1 billion a year—had as its main recommendation the aim to improve the outputs of the programme (for example, improving the employment prospects of participants and achieving the maximum possible benefit to the Community) and this is being carried forward actively. In addition, the Department attaches importance to developing the management skills and experience of its staff through training and management development programmes to ensure that staff can identify and implement improvements in value for money.