11.04.13
Government accounts late and incomprehensible – PAC
The Treasury’s report on the Whole of Government Accounts (WGA), has been criticised by the House of Commons Public Accounts Committee (PAC) for lacking transparency, timeliness and quality of data.
Published in October 2012, for 2010-11, the Treasury report showed the annual deficit as £94.4bn, a reduction of £68.3bn. However this includes a gain from the decision to change the measure of inflation used to up-rate payments to pensioners from the Retail Price Index to the Consumer Price Index with effect from 1 April 2011. Without this change, the deficit for 2010-11 would have been £220.4bn.
The committee said the Treasury “does not have a clear plan” to realise the potential of the WGA to manage public finances more effectively, and suggest it could be used to identify key financial risks.
The information used in the WGA was also out of date, PAC warned, as the Treasury took 19 months to publish. This “undermines its usefulness”, the committee said. Quality of data was also identified as an issue, with no effective sanctions or incentives in place to encourage bodies to submit better quality data.
The WGA could also cover data from more bodies that are effectively if not technically publicly bodies, such as the Royal Bank of Scotland and Network Rail.
Ian Carruthers, CIPFA’s director of policy, said: “We fully support the Committee’s call for a clear plan to continue to improve the Whole of Government Accounts so that they can be used more effectively to support decision making. The primary and most urgent challenges are to address current audit qualifications and to achieve more timely publication.
“The UK has made a significant investment through WGA which positions it at the forefront of good practice in government reporting internationally. We now need to reap the dividend of that investment by ensuring that information from WGA is used for decision making and to inform public understanding and debate about the health of the public finances.
“In practice, use of information from WGA for these purposes is likely to develop gradually over time. It would be tremendously helpful if the Treasury itself made a point of using information from WGA in economic statements."
“CIPFA, as the standard-setter in local government, remains committed to supporting HM Treasury as it strives to achieve these improvements.”
Tell us what you think – have your say below, or email us directly at [email protected]