The following article is a profile on the Cayman Islands new Governor who will be taking up her appointment here in September 2013.

The article was written by Michelle Perry and published on September 2006 in Accountancy Age

Profile: Helen Kilpatrick, Home Office FD

It’s surprising what chance encounters can lead to. When Helen Kilpatrick walked into the Greater London Council over two decades ago she had her heart set on a career working for London’s left-wing firebrand Ken Livingstone.

But on the day Kilpatrick went to the GLC (abolished in 1986 by the Tories), there was a careers fair focused on accountancy. With the importance of a professional qualification ringing in her ears, she signed up for three years of training. ‘I became an accountant by mistake! It could so easily have been legal trainee day there,’ she confides.

Despite accountancy being typically associated with less turbulent career paths, Kilpatrick has ended up working in the Home Office at a time when accounting and politics are in the eye of the storm.

Presently she finds herself working alongside another straight-talking politician, home secretary John Reid. Well, for the time being anyhow ­ the Home Office has been run by three different ministers in as many years.

In February 2005 she was appointed finance director at the Home Office, or director general financial and commercial to quote her official title. She took up her post in April 2005 as part of a government-wide goal to have qualified accountants as FDs in every department by the end of 2006. It was almost a year to the day from her appointment that the asylum scandal hit the department, then under Charles Clarke, and triggered a wholesale review of the department’s management.

For Kilpatrick, however, the turmoil has offered her opportunities in which she can make her mark. She already has a clear idea of how Whitehall worked ­ she spent the best part of her career working in senior finance roles in local government ­ so it was just a case of getting used to the scale of things and constitutional procedures.

It is here where she finds the greatest differences. ‘The relationship between ministers and officials is different to that between councillors and finance officers. The CFO in local authorities is responsible to the whole council and not just the party that’s leading, and also has duties in relation to the public that override their duties even to the council.’

In the civil service the buck stops with the minister and there’s no particular statutory basis for the finance service as in local government. ‘In a sense,’ she says, ‘the relationship is less clear’.

Kilpatrick sits on the Home Office board and reports directly to permanent secretary Sir David Normington ­ nicknamed the ‘smiling assassin’ for his work at another government department ­ who chairs the board.

She is responsible for a budget worth £13bn. If you include the police budget, which is raised from council taxes, and local government grants, that figure rises to a significant £18bn, totalling 3% of public spending.

Put like that Kilpatrick says it sounds a lot, but when you consider that the money must deal with some of the UK’s most pressing and emotive issues, it’s not that large, she argues. For a quick snapshot of what the money deals with, it encompasses everything from counter terrorism and immigration to prisons and asylum seekers.

‘There are huge responsibilities that have to be discharged with that money. I think the key responsibility of the finance person who’s on the board is making sure the Home Office is able to direct its resources in the areas that are most needed,’ she says.

The government’s goal ­ led by Mary Keegan, the Treasury’s managing director of government financial management ­ to run government departments in a manner more akin to the private sector might take longer than imagined. Government’s stakeholders are, after all, the entire British population, rather than a select few monied investors.

‘Obviously you have to have the normal finance skills. But I don’t think those are the most important for a broader finance role. I think the most important now is understanding the business and the challenges faced by the Home Office and managing the budgets.’

Observers may scoff at Reid’s 100-day plan to turn the department around and, in light of the latest revelations on illegal workers in the UK, most might say it’s already failed, but for Kilpatrick and her finance team at least it offers them clear parameters. ‘We are now in a position where the Home Office does need to reform, but we’ve got a steer on what his priorities are, and have very clear plans of what needs to be done,’ she says.

Improving financial management was already underway across government before Reid came to office. ‘It fits really well into the reform plan and is underpinning the plan. It’s no good having the resources in place if you haven’t got the skills to underpin it.’

But Kilpatrick is the first finance chief at the Home Office to be professionally qualified. With this in mind, it is perhaps no surprise that the department’s accounts for the financial year 2004/05 remain qualified. And not just qualified, but also disclaimed ­ the most serious level of audit qualification.

Before summer recess the influential Commons public accounts committee criticised the accounts and accounting system, following a severe reprimand by the National Audit Office. ‘The accounts for 04/05 were qualified and it’s now impossible to move from a qualified set of accounts to a clean set,’ Kilpatrick explains.

Worse still, it’ll take at least two years to get a clean bill of health for the department’s accounts. ‘If you have a disclaimed set of accounts, technically you haven’t got any accounts because the auditor hasn’t been able to give an opinion. The following year a set of accounts is like the opening accounts,’ says Kilpatrick.

‘It may be fair to say that the Home Office hadn’t appreciated in the past the benefit of a really professional financial accounting function. But it’s a high priority now. There’s an overwhelming amount of pressure to get a clean bill of health, but because of the historical problems we have to be realistic about what level of quality we can receive,’ she adds.

One advantage for the finance team is that the department has already agreed its spending review until 2007 with the chancellor. Although the budget will remain flat in real terms, it does mean that Kilpatrick knows exactly how much money she’s working with.

Kilpatrick, however, must also manage to save. The Gershon review requires the department to make £2bn worth of efficiency savings to meet the spending review target of 2004. They have made £1.5bn of savings so far. But the figure of 2% savings, will from 2006 rise to 3%.

‘We are committed to reducing HQ staff by a third over the period of the spending review. There’s an opportunity to manage that because people don’t have to be made redundant as many can be redeployed to the front line,’ says Kilpatrick.

The current troubles at the Home Office don’t seem to faze Kilpatrick however. On the contrary, they appear to galvanise her determination to clean up the financial mess she walked into.

‘There isn’t a single day that goes by at the moment that you don’t wake up and hear about something that’s happening in the office on Radio 4 before you’ve even got out of bed. I think that’s a good thing because it shows that the things you’re working on matter to people in the country.’

Her test will come in around two years’ time, however, when the accounts can for the first time technically receive a clean bill of health. Then it will be clear how much the drive to recruit professional accountants has really achieved. Until then, the FD has to make sure finances are well channelled, as the minister might not enjoy the Radio 4 coverage as much as Kilpatrick.

Changing face of public sector FDs

Poor or, worse, mismanagement of public funds in the past has changed the attitude to the finance function employing professionally qualified accountants, instead of career civil servants, at the helm of finance teams in government departments.

The change has seen a conscious reform begun under Sir Andrew Likierman who spearheaded the grassroots reform by shifting government accounting from its traditional cash accounting to resources accounting, which is closer to private sector accounting.

The goal to have all government department finances managed by a professionally qualified accountant began with the appointment of Mary Keegan who had spent her entire 30-year career in the private sector. She joined HM Treasury in July 2004.This is hoped to be achieved either by poaching accountants from the private sector or by ensuring formal training internally.

Another trigger in the increased movement of private sector FDs into local and central government is the change in the way public works are delivered. Since New Labour took power in 1997,more and more public services have been delivered through public-private partnerships and private finance initiatives, meaning that the two teams have had to work more closely together to deliver to the public.

‘If you’re an accountant working on a big project with the private sector, it’s natural for people to move. I think there’s better communication between accountants in the private and public sectors,’ says Kilpatrick. ‘When I started my career they were totally different animals. That’s evidenced by the fact that, although it didn’t work, the merger between Cipfa and the ICAEW, only failed by 0.5% on the vote. Whereas if you’d had that vote when I started my career there would have been a big rift.’

‘The private sector accountants are getting a better appreciation of how interesting and challenging it is to work for government, and what the scope for accountants is.

The drive to professionalise the finance function in central government has helped that further, as it will encourage more private sector accountants to work for government,’ concludes Kilpatrick.

For more on this story go to:

http://www.accountancyage.com/aa/feature/1748048/profile-helen-kilpatrick-home-office-fd

EDITOR: Mrs Helen Kilpatrick CBE has been at the Home Office from 2005 to the present.