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Government told to improve ‘failing’ departmental accounts

Annual reports and accounts of government departments are currently failing in their purpose of explaining to the public and Parliament the purpose and effectiveness of government spending, MPs have today warned.

It was found that accounts were not designed for the purpose of democratic scrutiny, meaning that the fiscal goings on within government departments was not transparent enough to be useful to MPs or the public, leading to a lack of accountability for spending decisions.

The findings come from the Public Administration and Constitutional Affairs Committee (PACAC), which has published a report into the structure of annual reports and accounts (which are for Parliament and the public) and management accounts (for use by ministers and officials in managing their own departments).

PACAC also said that it believed the new framework for annual reports and accounts that was set out by the Treasury for departments in 2015-16 did not go far enough, and that it was “disappointing” that the Treasury had failed to monitor progress being made to reform accounts since the changes were introduced.

Annual accounts and reports play an important role for government, as they ensure that citizens can work out the value for money they are getting from departments from their tax money, and helps Parliamentarians hold ministers to account for their decisions.

A number of measures were recommended for the government to implement to improve the effectiveness of accounts, including departments reporting the unit costs of services to clearly explain to the public how much certain functions cost (such as a police officer visit, for example). 

And to improve the credibility of the accounts, the government were also instructed to make sure that performance information in the accounts was independently audited.

Finally, PACAC added that management accounts reforms should last for longer than a single Parliament to ensure that political and bureaucratic leadership of all departments was focused on long-term improvement.

“Financial accountability lies at the heart of Parliamentary sovereignty and of democratic government,” Bernard Jenkin, chair of PACAC stated.

“Parliament can only be what Gladstone described it as – the real authoritative steward of the public finances – if the government improves the accounts.”

The latest review comes after the NAO last year slammed the Civil Service for failing to hold ministers to account on spending.

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