Recommendations & Conclusions
16 items
2
Recommendation
69th Report - Whole of Government Accou…
Accepted
The Whole of Government Accounts (WGA) has received a disclaimed audit opinion for two consecutive years, with no clear indication that this position will improve in the near future. The Committee remains concerned that the Ministry of Housing, Communities and Local Government (MHCLG) is failing to exert sufficient pressure on …
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The Whole of Government Accounts (WGA) has received a disclaimed audit opinion for two consecutive years, with no clear indication that this position will improve in the near future. The Committee remains concerned that the Ministry of Housing, Communities and Local Government (MHCLG) is failing to exert sufficient pressure on local authorities and their auditors to restore assurance in the local government sector. While the statutory deadline for publishing audited accounts has helped reduce missing data, from 211 entities in 2022–23 to 201 in 2023–24, the level remains unacceptably high, and HM Treasury still projects that 145 entities will be missing from WGA 2024–25. Importantly, this improvement in underlying statutory accounts has not translated directly into timely submissions to the Whole of Government Accounts (WGA), and there is still further attention required from HM Treasury to increase WGA 3 submission rates. Moreover, the reduction in missing data has coincided with a rise in unaudited information, which undermines confidence in the consolidated accounts. The volume of unaudited data has grown significantly, from 211 entities in 2021–22 to 227 in 2022–23 and 280 in 2023–24. Missing and unaudited data (including consolidated components with a disclaimed opinion) undermines the reliability of the WGA and as a result it is likely that the C&AG will issue another disclaimer of opinion for WGA 2024–25. recommendation a. MHCLG should provide, alongside the Treasury Minute response to this report, a document setting out a clear timetable of required actions for local authorities and their auditors and explain how it will monitor and enforce accountability for these actions. b. The Treasury should consider how it can enhance transparency regarding the types of missing data by distinguishing between entities that are absent due to incapacity and those that are absent due to lack of compliance.
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Government response AI summary
MHCLG has written to the Committee alongside the Treasury Minute with the information requested in recommendation (a). The Treasury has expanded its analysis of the number of missing entities to cover a wider range of years and will continue to keep under review how further …
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HM Treasury
3
Recommendation
69th Report - Whole of Government Accou…
Accepted
The timing and delivery of local government reforms remain unclear. The local government audit crisis stems from long-standing issues, including fragmented system ownership, limited audit and finance capacity, rising regulatory demands, overly complex accounts and financial reporting requirements, and the low profitability of local audit work. To address delays and …
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The timing and delivery of local government reforms remain unclear. The local government audit crisis stems from long-standing issues, including fragmented system ownership, limited audit and finance capacity, rising regulatory demands, overly complex accounts and financial reporting requirements, and the low profitability of local audit work. To address delays and improve transparency, statutory deadlines (“backstop dates”) were legislated for on 9 September 2024, requiring audited local authority accounts to be published by set dates. These deadlines aim to accelerate audit completion, reduce the backlog, and restore confidence in timely financial reporting. However, whilst the backstop is increasing the number of accounts brought to completion, it is also resulting in a higher number of disclaimed opinions, leaving an assurance gap over the data included within these accounts. Further reform followed on 18 December 2024 with the Local Audit Reform Strategy, which includes provisions in the English Devolution and Community Empowerment Bill to establish a Local Audit Office as a unified oversight body. While MHCLG aspires to eliminate qualified or disclaimed accounts by 2027–28, its reliance on vague ambitions without clear milestones makes progress difficult to assess. MHCLG officials have been over-optimistic before about how quickly audit timeliness could be improved. It will be important that the Treasury does not underestimate the impact of local government reorganisation on the Whole of Government Accounts. 4 recommendation a. MHCLG should provide, alongside the Treasury Minute response, a document which sets out: • the actions already taken to address the local audit crisis, including milestones achieved to date, • Key dates and deliverables that remain outstanding, with clear evidence of how these will be met, • Further measures the department intends to implement to ensure resolution, including how it will ensure that auditors build back assurance in a tim
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Government response AI summary
MHCLG has written separately to the Committee alongside the Treasury Minute with the information requested in recommendation (a). The government has a clear ambition to clear all backstop-related disclaimed opinions by the end of 2027-28 and has published a transition plan setting out the arrangements …
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HM Treasury
4
Recommendation
69th Report - Whole of Government Accou…
Accepted
The Treasury has improved long-term liability disclosures, but further work is needed to clearly convey their insights and relevance to readers. The WGA includes several large and complex liabilities, which the Committee has previously noted are difficult for readers to understand and whose values change significantly due to changes in …
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The Treasury has improved long-term liability disclosures, but further work is needed to clearly convey their insights and relevance to readers. The WGA includes several large and complex liabilities, which the Committee has previously noted are difficult for readers to understand and whose values change significantly due to changes in the discount rate. The three largest liabilities include: • Nuclear Decommissioning provision: Decreased by £19.1 billion from £126.0 billion in 2022–23 to £106.9 billion in 2023–24. • Clinical Negligence provision: As of 31 March 2024, the Department of Health and Social Care (DHSC) reported clinical negligence provisions totalling £58.2 billion, a decrease from £69.3 billion at 31 March 2023. • Pension liabilities: net pension liabilities have decreased from £2,639.1 billion in 2021–22 to £1,311.9 billion at 31 March 2024. Discount rates are used to calculate the present value of future cash flows, reflecting how much a future obligation is worth today, and are closely linked to interest rates, gilt yields, and inflation. Under International Financial Reporting Standards (IFRS), HM Treasury correctly applies a real discount rate (adjusted for inflation) to value long-term obligations. However, the Committee has previously urged HM Treasury to present both discounted and undiscounted values for all major liabilities to improve transparency and accessibility for readers. We strongly believe these 5 figures should be comparable year-on-year so that it is possible to see what action is being taken by the Government to reduce these liabilities. In 2023–24 HMT produced discounted and undiscounted values for the nuclear decommissioning provision balance only. There is therefore no reason why they should not produce it for all other long-term liabilities. recommendation a. In addition to the discounted values required under IFRS, Treasury should disclose undiscounted values for: i) Nuclear Decommissioning provision, ii) Clinical Negligence
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Government response AI summary
The Treasury will expand the section on undiscounted liabilities in the 2024-25 WGA by presenting provisions on a fully undiscounted basis, and will also provide an alternative presentation using a flat 2% discount rate applied on a net-of-CPI basis to illustrate the impact of discounting.
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HM Treasury
6
Recommendation
69th Report - Whole of Government Accou…
Accepted
The Whole of Government Accounts (WGA) is not sufficiently transparent on devolved spending. The WGA is designed to provide a comprehensive picture of the UK’s public sector finances and support more effective management of fiscal risks. By consolidating financial information across government, the WGA aims to improve transparency and enable …
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The Whole of Government Accounts (WGA) is not sufficiently transparent on devolved spending. The WGA is designed to provide a comprehensive picture of the UK’s public sector finances and support more effective management of fiscal risks. By consolidating financial information across government, the WGA aims to improve transparency and enable better-informed decision-making on long-term obligations and fiscal sustainability. However, the Committee notes that the WGA does not currently offer sufficient evaluation of devolved governance structures or detailed examination of how devolved budgets are allocated and managed. This gap limits the ability of Parliament and the public to fully understand the financial implications of devolution and assess whether resources are being used efficiently across the UK. Furthermore, recent analysis indicates that Scotland are the second-poorest performing sector—surpassed only by the Local Authority sector—in the timely submission of returns to the WGA. The lack of data from Scottish entities is a serious impediment to scrutinise all parts of the UK public sector to provide value for money. recommendation a. Treasury should outline in their Treasury Minute response how the WGA disclosures will be updated in the 2024–25 annual report and accounts to clarify devolved spending. b. Treasury should outline in their Treasury Minute response how they will ensure Scottish entities submit audited data in the 2024–24 WGA. 7 1 Missing and unaudited data Introduction
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Government response AI summary
The Treasury will provide additional information on devolved expenditure in the performance report section of the 2024-25 accounts, giving clearer visibility of devolved spending across the nations of the UK. The Scottish Government has committed to strengthening its oversight and support arrangements to improve future …
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HM Treasury
7
Conclusion
69th Report - Whole of Government Accou…
Accepted
WGA has the ability to illuminate long-term risks and structural pressures on public finances, offering Parliament a more strategic lens for oversight. We questioned the Treasury on how it was going to make the WGA a more integrated part of people’s financial awareness and financial thinking. The Treasury replied that …
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WGA has the ability to illuminate long-term risks and structural pressures on public finances, offering Parliament a more strategic lens for oversight. We questioned the Treasury on how it was going to make the WGA a more integrated part of people’s financial awareness and financial thinking. The Treasury replied that it intended to streamline the performance report and present it in a more visual, accessible format. It explained that future reports will use infographics and QR-enabled features to increase online engagement, alongside HTML-based formats to offer a more interactive experience for the public.12
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Government response AI summary
The government agrees with the Committee and states the recommendation is implemented, highlighting that it has already improved WGA accessibility through new sections, additional disclosures, a supplementary handbook, and teach-in sessions for Parliamentary staff. It also notes ongoing reviews and monitoring of the WGA's composition …
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HM Treasury
9
Conclusion
69th Report - Whole of Government Accou…
Accepted
The requirement to produce WGA is set out in the Government Resources and Accounts Act 2000 (GRAA).14 The Treasury publish annual submission guidance outlining that all entities are required to submit Cycle 1 and Cycle 2 submissions by respective deadlines. Cycle 1 is a draft data submission based on the …
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The requirement to produce WGA is set out in the Government Resources and Accounts Act 2000 (GRAA).14 The Treasury publish annual submission guidance outlining that all entities are required to submit Cycle 1 and Cycle 2 submissions by respective deadlines. Cycle 1 is a draft data submission based on the entity’s unaudited data, while the Cycle 2 submission should agree to the entity’s final audited data and published account position. Additionally, submissions from bodies over a £2 billion threshold require sign off by their statutory auditors.15
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Government response AI summary
The government states it agrees with the Committee's implied recommendation regarding the Whole of Government Accounts process and that it has already been implemented, citing ongoing wider reforms in the local audit sector and actions taken to improve WGA accessibility and compliance.
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HM Treasury
10
Conclusion
69th Report - Whole of Government Accou…
Accepted
We challenged Treasury on the acceptability of the WGA disclaimed opinion due to missing or unaudited data from local authorities and the Treasury acknowledged that the situation is unsatisfactory. It reported, however, that it expects the number of missing entities to fall from 201 in 2023–24 to approximately 145 in …
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We challenged Treasury on the acceptability of the WGA disclaimed opinion due to missing or unaudited data from local authorities and the Treasury acknowledged that the situation is unsatisfactory. It reported, however, that it expects the number of missing entities to fall from 201 in 2023–24 to approximately 145 in WGA 2024–25.16 The Treasury and MHCLG indicated that any future reduction in missing data is expected to result from the backstop mechanism.17 Backstop dates force the publication of local 11 Bradley, L., Heald, D., and Hodges, R, The under-realized potential usefulness of the UK Whole of Government Accounts, Public Money and Management, 45(6), 17 December 2023 12 Q 39 13 Q 55 14 Government Resources and Accounts Act 2000 15 HMT, Whole of Government Accounts 2023 to 2024: guidance for preparers, accessed 18 February 2026 16 Q 3 17 Q 30 10 authority accounts even if audits are incomplete. If the local authority audit has not been completed at the date of the backstop, then the auditor will issue a disclaimed audit opinion.
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Government response AI summary
The government agrees with the Committee's observation, stating that the local audit backstop programme is already making significant progress in improving timely publication of accounts, with increasing proportions of bodies publishing on time. It expects the local audit position to improve over the next two …
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HM Treasury
18
Conclusion
69th Report - Whole of Government Accou…
Accepted
The WGA includes several large and complex long-term liabilities that the previous Committee identified as difficult for readers to interpret owing to their significant sensitivity to movements in the discount rate.36
Government response AI summary
The government agrees with the implied recommendation regarding the transparency of long-term liabilities in the WGA. It commits to expanding the section on undiscounted liabilities in the 2024-25 WGA, providing an alternative presentation using a flat 2% discount rate, and will work with GAD to …
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HM Treasury
19
Conclusion
69th Report - Whole of Government Accou…
Accepted
The three largest liabilities are: the nuclear decommissioning provision which fell by £19.1 billion, from £126.0 billion at 31 March 2023 to £106.9 billion at 31 March 2024; the clinical negligence provision which decreased from £69.3 billion at 31 March 2023 to £58.2 billion at 31 March 2024; and net …
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The three largest liabilities are: the nuclear decommissioning provision which fell by £19.1 billion, from £126.0 billion at 31 March 2023 to £106.9 billion at 31 March 2024; the clinical negligence provision which decreased from £69.3 billion at 31 March 2023 to £58.2 billion at 31 March 2024; and net pension liabilities which also declined substantially, from £1,415 billion at 31 March 2023 to £1,311.9 billion at 31 March 2024, having already fallen from £2,639.1 billion at 31 March 2022.37
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Government response AI summary
The government agrees and commits to enhancing the transparency of long-term liabilities in future WGA publications by working with GAD to separately identify discount rate impacts and expanding the section on undiscounted liabilities in the 2024-25 WGA.
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HM Treasury
20
Recommendation
69th Report - Whole of Government Accou…
Accepted
Under IFRS, the Treasury uses a real (inflation-adjusted) discount rate to value long-term obligations such as provisions and pensions. While appropriate under accounting rules, this means annual movements in liabilities can reflect economic shifts rather than changes in policy or risk. To aid transparency and comparability between years, we have …
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Under IFRS, the Treasury uses a real (inflation-adjusted) discount rate to value long-term obligations such as provisions and pensions. While appropriate under accounting rules, this means annual movements in liabilities can reflect economic shifts rather than changes in policy or risk. To aid transparency and comparability between years, we have previously urged HM Treasury to publish both discounted and undiscounted values for all major long-term liabilities.38 HM Treasury produced discounted and undiscounted values only for the nuclear decommissioning provision in 2023–24.39
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Government response AI summary
The government accepts the recommendation to publish both discounted and undiscounted values for long-term liabilities, with a target implementation date of June 2026, and will expand the 2024-25 WGA to present provisions on a fully undiscounted basis.
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HM Treasury
21
Conclusion
69th Report - Whole of Government Accou…
Accepted
We asked the Treasury to explain why undiscounted information had not been provided for all major liabilities in the WGA 2023–24 despite being asked to. The Treasury stated that it is considering extending this approach to pensions and clinical negligence however noted that the methodology is more complex, particularly for …
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We asked the Treasury to explain why undiscounted information had not been provided for all major liabilities in the WGA 2023–24 despite being asked to. The Treasury stated that it is considering extending this approach to pensions and clinical negligence however noted that the methodology is more complex, particularly for pension liabilities, but confirmed that it was consulting with the Government Actuary’s Department on the most appropriate approach to discounting future liabilities for inflation.40 36 Letter to HM Treasury, 24 May 2024 37 HMT, Whole of Government Accounts: year ended 31 March 2023, HC 289, 26 November 2024; HMT, Whole of Government Accounts: year ended 31 March 2024, HC 917, 17 July 2025 38 Committee of Public Accounts, Whole of Government Accounts 2022–23, Sixteenth Report of Session 2024–25, HC 367, 19 March 2025, Recommendation 5a 39 HMT, Whole of Government Accounts: year ended 31 March 2024, HC 917, 17 July 2025, p 78 40 Q 40 14
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Government response AI summary
The government agrees with the implied recommendation for greater transparency in long-term liabilities. It commits to expanding the section on undiscounted liabilities in the 2024-25 WGA, providing an alternative presentation using a flat 2% discount rate, and will work with GAD to include this information …
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HM Treasury
23
Recommendation
69th Report - Whole of Government Accou…
Accepted
We pressed the Treasury on whether the Government should be exploring alternative ways of paying for or funding public service pension liabilities. The Treasury responded that public service pensions remain unfunded, pay-as-you-go schemes as this is consistent with Government’s overall approach to managing the balance sheet.43 And that therefore this …
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We pressed the Treasury on whether the Government should be exploring alternative ways of paying for or funding public service pension liabilities. The Treasury responded that public service pensions remain unfunded, pay-as-you-go schemes as this is consistent with Government’s overall approach to managing the balance sheet.43 And that therefore this was not something the Government were actively looking at changing. It also pointed out that the pension liability is paid for from tax revenue, but [future] tax is not recognised as an asset.44 Non-coterminous reporting dates
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Government response AI summary
The government agrees with the recommendation but indicates that existing measures, such as the public service schemes introduced in 2014-2015 with changed retirement ages and contributions, and the ongoing Cost Control Mechanism, already address the need to manage public service pension liabilities.
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HM Treasury
26
Conclusion
69th Report - Whole of Government Accou…
Accepted
The Whole of Government Accounts (WGA) is intended to present an integrated assessment of the United Kingdom’s public sector finances, enabling clearer oversight of fiscal exposures and long-term financial commitments. By drawing together financial information from across the UK it should allow Parliament to evaluate the financial consequences of devolution …
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The Whole of Government Accounts (WGA) is intended to present an integrated assessment of the United Kingdom’s public sector finances, enabling clearer oversight of fiscal exposures and long-term financial commitments. By drawing together financial information from across the UK it should allow Parliament to evaluate the financial consequences of devolution and determine whether public funds are being deployed effectively and consistently across the UK.52
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Government response AI summary
The government agrees with the Committee's observation, stating that ongoing wider reforms in the local audit sector and existing Treasury actions to improve WGA accessibility and compliance are expected to address weaknesses and ensure the WGA fulfils its intended purpose. They also state the recommendation …
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HM Treasury
27
Recommendation
69th Report - Whole of Government Accou…
Accepted
We challenged the Treasury on how the WGA presents the spending of devolved nations and the lack of clarity regarding how devolved budgets are allocated and managed.53 The Treasury responded that it will not separate the financial statements by devolved administration but will consider adding greater transparency in future performance …
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We challenged the Treasury on how the WGA presents the spending of devolved nations and the lack of clarity regarding how devolved budgets are allocated and managed.53 The Treasury responded that it will not separate the financial statements by devolved administration but will consider adding greater transparency in future performance reports to outline spending and outcomes across the UK nations.54
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Government response AI summary
The government agrees with the recommendation and commits to providing additional information on devolved expenditure in the performance report section of the 2024-25 accounts, with a target implementation date of June 2026, to give clearer visibility of devolved spending.
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HM Treasury
28
Conclusion
69th Report - Whole of Government Accou…
Accepted
We also expressed concern on the lack of data from Scottish entities which poses a serious impediment to scrutinise all parts of the UK public sector to provide value for money.55 Of the 34 Scottish Central Government entities, 19 (56%) submitted audited data, 10 (29%) submitted unaudited data and 5 …
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We also expressed concern on the lack of data from Scottish entities which poses a serious impediment to scrutinise all parts of the UK public sector to provide value for money.55 Of the 34 Scottish Central Government entities, 19 (56%) submitted audited data, 10 (29%) submitted unaudited data and 5 (15%) were part of missing data. Of the 35 Scottish Local Government entities, 13 (37%) submitted audited data, 10 (29%) submitted unaudited 49 HMT, Whole of Government Accounts: year ended 31 March 2024, HC 917, 17 July 2025, p 129 50 HC 367, Q 59 51 Q 62 52 Q 71 53 Qq 70-71 54 Q 73 55 Q 72 16 data and 12 (34%) were missing.56 We received written evidence claiming that Scottish local authorities would have had published accounts available but chose not to submit.57
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Government response AI summary
The government agrees with the committee's concern, committing to provide additional information on devolved expenditure in the performance report section of the 2024-25 accounts by June 2026 to enhance transparency and visibility of Scottish public sector spending.
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HM Treasury
29
Conclusion
69th Report - Whole of Government Accou…
Accepted
The Treasury highlighted that Scottish entities do not have a legal requirement to submit a WGA return.58 Under the Government Resources and Accounts Act 2000 HM Treasury may designate a body for inclusion in WGA unless its activities relate entirely to Scotland.59 Therefore, Scottish entities are not included in the …
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The Treasury highlighted that Scottish entities do not have a legal requirement to submit a WGA return.58 Under the Government Resources and Accounts Act 2000 HM Treasury may designate a body for inclusion in WGA unless its activities relate entirely to Scotland.59 Therefore, Scottish entities are not included in the Whole of Government Accounts (Designation of Bodies) Order 2024 – the statutory instrument relevant to WGA 2023–24.60 The Scottish Government makes separate administrative arrangements for bodies in Scotland to provide data.61 56 HMT, Whole of Government Accounts: year ended 31 March 2024, HC 917, 17 July 2025 57 Professor David Heald (WGA0002) 58 Q 72 59 Government Resources and Accounts Act 2000, Section 10 (6) 60 The Whole of Government Accounts (Designation of Bodies) Order 2024 61 HMT, Whole of Government Accounts: year ended 31 March 2024, HC 917, 17 July 2025, p 17 17
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Government response AI summary
The government agrees, with a target implementation date of June 2026. The Treasury will provide additional information on devolved expenditure in the performance report section of the 2024-25 accounts to enhance transparency and understanding of devolved spending.
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HM Treasury