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No hope?

Finance | Gareth Jones | 17 Jan 2008

The summer used to be a quiet time, or perhaps it just seemed that way. In any case, in the two months since Charity Finance last appeared, there has been no shortage of reports and announcements. But on closer examination is there anything that is really new?

The National Audit Office reported on the complexity of funding faced by large charities in public service delivery and called for a simplification in the process. Futurebuilders and acevo shocked everyone by stating that the commissioning process needs improving. Gordon Brown promised the sector the earth, in the shape of £515m, as he unveiled the long- awaited Third Sector Review, but this looked less impressive once the new commitments of funding had been untangled from existing promises and announcements we thought we'd sort of heard before.

Yes, the above activity shows that the sector remains firmly on the government's radar, but where is the evidence of real progress on removing the obstacles that seem to have been there for years?

Another thing we have heard before is the official line on irrecoverable VAT, with the government's stubbornness demonstrating an admirable consistency of approach missing in some of its other operations. But the fact the latest indication that the sector really should shut up about its £500m burden came from its new minister was more worrying.

It's early days yet for Phil Hope (pictured) but the signs are he is going to be more effective at provoking witty (or otherwise) headlines on his surname than action within government. He is certainly no Ed Miliband and while the younger Brownite meteor could be seen purposefully walking into an urgent meeting on the latest crisis in the countryside, Hope was left with his foot in his mouth over comments he made suggesting that the sector had given up on the perennial VAT bugbear. Which was certainly news to the Charity Tax Group and Directory of Social Change among others.

Not a good start to Hope's engagement with the sector by dismissing out of hand one of its major gripes, seemingly without taking the time to fully understand it. He could argue that by getting the VAT thing out of the way early he's controlling expectations but it doesn't inspire much confidence of Hope becoming the dynamic champion the sector needs.

Qualified successes

There was a time when having career aspirations within charity finance would have been considered at best worthy but dull, but much has changed. There are now a number of qualifications available for those wanting to develop in this area (find out more).

While the availability of these courses is great, senior management, including finance directors, have a responsibility to encourage aspiring staff to study, by motivating and supporting them both in terms of time and cost. We have heard a lot from the CFDG recently about the changing role of the finance director, and the increased focus on strategic involvement, which is all well and good and reflects the position of its current membership. But it, and its members, should also surely be playing their part in preparing the FDs of tomorrow.

CFDG does offer one-day courses on the basic essentials of charity accounting. And while it is encouraging that Keith Hickey, its chief executive, was among the first to complete the ICAEW's new diploma via the experience route, and is encouraging professional development generally for members, could more be done for finance staff starting out their careers? After all they could be CFDG's future members.

Clearly, finance directors coming into charities from the corporate world with good commercial habits have been a major factor in driving professionalisation forward and this shouldn't be lost. But if more of the sector's future FDs are coming into their role from within the sector with appropriate charity finance qualifications, they will be more effective managers both from a technical finance point of view and in their understanding of the sector generally. Which will in turn drive up their contribution to strategic matters. 

Gareth Jones is a senior reporter for Charity Finance magazine

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