For those of you researching our Public Sector Audit graduate schemes you may have come across a previously unheard acronym, “CIPFA”. It stands for the Chartered Institute of Public Finance and Accountancy and is the professional qualification for accounting in the public sector. After three years of study (and work experience) you will be a Chartered Accountant qualified to work in both the public and private sectors, with CIPFA qualified accountants in senior positions at the IMF, BBC, Olympic Delivery Committee and all of the large accountancy firms.
Following on from Nick’s blog on tax avoidance I decided I’d offer up my thoughts on another hot topic that’s filling a lot of newsprint at the moment. Next year sees significant changes to the benefits system through the introduction of universal credit. This week the Prime Minister has been politicking based on possible changes to the benefits system to counter a (his words not mine) ‘culture of entitlement’ amongst certain sections of society. I’m not going to offer an opinion on whether I agree or disagree with Cameron’s policy suggestions, but I will explain how the welfare state has and continues to affect me, both personally and professionally.
The first way everyone feels the effect of benefits when not in direct receipt of them is through tax and National Insurance. Using HMRC’s tax calculator mobile app I can tell you that 33.3% of my contributions are spent on the welfare state. This is the largest single proportion of my contributions, roughly double that spent on healthcare, which sounds like a lot. Now there are a myriad of types of benefit which I couldn’t possibly cover in this blog, so I’m going to focus on housing benefit and council tax.
I’m quite happy to say that I’ve been a recipient of state benefits. This was during 2009-10 when I’d left university after staying on to carry out research. I worked for a local business to start with, living at my parent’s house. Living at home wasn’t an option as there was little in the way of graduate employment opportunities in the rural area where my family lives, so moving to a city like Manchester (getting on my bike so to speak) seemed like a good way to pursue work. I found it very difficult to get any kind of full time work. So, despite working temporary contracts when I could get work, I signed onto and off of Jobseekers allowance which meant I also received housing and council tax benefits for periods between employment. This time on benefits wasn’t a period of entitlement, it was because there was no other means of supporting myself. I’d apply for multiple vacancies for entry level jobs. I heard back from very few, mainly temporary contracts lasting less than a month. There is one particular story I always think of when discussing how difficult it was to find work. I remember applying for roles on a popular agency website. On this site you can see how many other applications have been submitted and it updates pretty quickly. Every time an entry level or temporary job was posted this counter would reach over a 100 applications within minutes.
So getting into work was a struggle and I imagine that if I hadn’t been afforded the opportunities in life I’ve had and been fortunate to successfully get this training contract it would be a perpetual struggle to find full time employment. I’m very grateful for the support that the benefits system gave me, and I’m happy to contribute my taxes so others can benefit from the welfare state. I’m not saying my story is typical and I know it glosses over the long-term unemployment issues our society has. But I believe the welfare state should exist, it just needs improving so that it helps and encourages people to gain employment, but gaining employment, particularly in times of recession is no easy feat.
Now fast forward a couple of years and my relationship with the welfare state has changed from being a recipient to an auditor of housing and council benefit claims. For the past two weeks I’ve been carrying out certification work on a council’s claim to the Department for Work and Pensions for housing and council tax benefit subsidy. This involves testing different types of benefit case across different categories amongst other testing to ensure that entitlement has been correctly determined and that the council has seen all appropriate evidence from a claimant before awarding benefits. This is one of the more complex areas which is specific to public sector audit and requires a solid understanding of very detailed technical guidance that governs the benefits system. It also demands objectivity and sensitivity as you are granted access to details of people’s private lives, so full security vetting is necessary and there are, quite rightly, incredibly strict confidentiality and data protection arrangements.
Whilst I can’t comment specifically on the work I’ve done, having seen the system from both sides it’s clear that there is both a need for a safety net but also that the system is very complex and will benefit from reform to ensure it continues to provide this support in a sustainable way. How these changes are designed and implemented is a task for the politicians. Although it is a long way off, if the current media attention is anything to go by this could be a major differentiator between parties come the next general election in May 2015.
This week has certainly been a big week for my department. As you may know I work in Public Sector Assurance which provides audit services to local government and the NHS. This week saw some very significant announcements for my service line. Following a long tendering process with the Audit Commission it was announced on Monday that Grant Thornton has been awarded contracts to deliver local government and NHS audit in the South West, the North West, the West Midlands and South London, Surrey and Kent. These contracts combined are worth 41.3 million pounds per year for five years and will make us the largest single supplier of public sector audit services in England.
In the past this work was carried out by the Audit Commission itself which was one of the first casualties identified in the so called ‘bonfire of the Quangos’ instigated by the Coalition Government when it came into power in 2010. It has taken the past couple of years to complete the tendering process that resulted in the work being contracted out to private sector accountancy firms.
I’m very proud to say that Grant Thornton was selected on the basis of the quality and cost effectiveness of our work.. It has been great over the past few days to read about our success in the Financial Times, Times, Guardian, Daily Telegraph and Accountancy publications. It really shows how ambitious the firm is in growing in our target markets and playing to our key strengths.
Not only does this sounds impressive in terms of the market share and financial value it also means that the national assurance team, which I am part of, will be joined by approximately 300 members of Audit Commission staff across the country at the end of this year. It will also mean we will gain hundreds of new audited bodies across the UK. So it will definitely be an exciting and challenging year as the reality of this win comes in to fruition come September.
This is a massive opportunity for myself and my fellow Public Sector Assurance trainees to develop our skills and experience. I will be entering my third year as a graduate trainee in the midst of all of these changes, so potentially I’ll be in a position to in-charge audits at new bodies and work with new colleagues.
Hopefully this news will provide you with some additional inspiration so that you think about applying to work for what will be the largest provider of public sector audit services in the country. We can truly say that Grant Thornton is now leading the way for the future of public audit.