Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
Require the Department to urgently agree permanent measures for complex local accounts and their audit.
Recommendation
Government, local bodies and standard setters still lack a shared view of how to ensure that local public accounts, and the audit of them, are fit for purpose. Local government accounts have become increasingly complex. They have to meet financial reporting standards while also reflecting how local government finance works, a challenge that increases with the more complex activities that authorities undertake. Local government accounts are too often inaccessible to most users and few in the sector think they work as well as they ought. Some temporary simplifications have been made to financial reporting requirements to help reduce the burdens for preparers and auditors. But both producers and auditors of accounts consider many areas of accounting and auditing requirements as overly complex and resource intensive; particularly around valuations of operational assets such as roads and coastal defences which cannot readily be sold, and valuations of pension assets and liabilities. In these instances, some accounting practitioners and auditors believe more often than not the numbers in the accounts have little to no impact on day-to-day decision making. Recommendation 6: The Department should set out as a matter of urgency, alongside its Treasury Minute response if not before, how it will work with HM Treasury, the FRC and others to agree permanent and proportionate measures to address the most complex parts of local bodies’ accounts and the subsequent audit of them. 8 Timeliness of local auditor reporting 1 The audit backlog and its impact Introduction
Government Response Summary
The government agrees and states the recommendation is implemented. It references Minister Rowley's evidence and letter updating on early work to review complex areas of local authority accounting, and the Permanent Secretary has written to summarise this work, with a further update expected after the summer.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented On 17 July 2023, Minister Rowley, gave evidence to the Levelling Up, Housing and Communities Committee inquiry into local financial reporting and audit. This followed his letter to the Committee of 14 July 2023 which updated on early work to deliver reforms across the system, including reviewing the most complex areas of local authority accounting, with a particular focus on the valuation of non-investment assets and pensions and associated auditing requirements. The Permanent Secretary has written to the Committee alongside the publication of this Treasury Minute to summarise this work. The Committee will be provided with a further update after the summer once this work has progressed further. Treasury Minutes Archive2 Treasury Minutes are the government’s response to reports from the Committee of Public Accounts. Treasury Minutes are Command Papers laid in Parliament. Session 2022-23 Committee Recommendations: 402 Recommendations agreed: 357 (89%) Recommendations disagreed: 45 Publication Date PAC Reports Ref Number July 2022 Government response to PAC reports 1, 3 & 10 CP 722 August 2022 Government response to PAC reports 2, 4-8 CP 708 September 2022 Government response to PAC reports 9, 13-16 CP 745 November 2022 Government response to PAC reports 11, 12, 17 CP 755 December 2022 Government response to PAC reports 18-22 CP 774 January 2023 Government response to PAC reports 23-26 CP 781 February 2023 Government response to PAC reports 27-31 CP 802 March 2023 Government response to PAC reports 32-36 CP 828 May 2023 Government response to PAC reports 37-41 CP 845 June 2023 Government response to PAC reports 42-47 CP 847 July 2023 Government response to PAC reports 48-54 CP 902 August 2023 Government response to PAC reports 55-60 CP 921 Session 2021-22 Committee Recommendations: 362 Recommendations agreed: 333 (92%) Recommendations disagreed: 29 Publication Date PAC Reports Ref Number August 2021 Government response to PAC reports 1-6 CP 510 September 2021 Government response to PAC reports 8-11 CP 520 November 2021 Government response to PAC reports 7,13-16 (and TM2 BBC) CP 550 December 2021 Government response to PAC reports 12, 17-21 CP 583 January 2022 Government response to PAC reports 22-26 CP 603 February 2022 Government response to PAC reports 27-31 CP 631 April 2022 Government response to PAC reports 32-35 CP 649 April 2022 Government response to PAC reports 36-42 CP 667 July 2022 Government response to PAC reports 49-52 CP 722 Session 2019-21 Committee Recommendations: 233 Recommendations agreed: 208 (89%) Recommendations disagreed: 25 Publication Date PAC Reports Ref Number July 2020 Government responses to PAC reports 1-6 CP 270 September 2020 Government responses to PAC reports 7-13 CP 291 2 List of Treasury Minutes responses for Sessions 2010-15 are annexed in the government’s response to PAC Report 52 Publication Date PAC Reports Ref Number November 2020 Government responses to PAC reports 14-17 and 19 CP 316 January 2021 Government responses to PAC reports 18, 20-24 CP 363 February 2021 Government responses to PAC reports 25-29 CP 376 February 2021 Government responses to PAC reports 30-34 CP 389 March 2021 Government responses to PAC reports 35-39 CP 409 April 2021 Government responses to PAC reports 40- 44 CP 420 May 2021 Government responses to PAC reports 45-51 CP 434 June 2021 Government responses to PAC reports 52-56 CP 456 Session 2019 Committee Recommendations: 11 Recommendations agreed: 11 (100%) Recommendations disagreed: 0 Publication Date PAC Reports Ref Number January 2020 Government response to PAC report [112-119] 1 and 2 CP 210 Session 2017-19 Committee Recommendations: 747 Recommendations agreed: 675 (90%) Recommendations disagreed: 72 (10%) Publication Date PAC Reports Ref Number December 2017 Government response to PAC report 1 Cm 9549 January 2018 Government responses to PAC reports 2 and 3 Cm 9565 March 2018 Government responses to PAC reports 4-11 Cm 9575 March 2018 Government responses to PAC reports 12-19 Cm 9596 May 2018 Government responses to PAC reports 20-30 Cm 9618 June 2018 Government responses to PAC reports 31-37 Cm 9643 July 2018 Government responses to PAC reports 38-42 Cm 9667 October 2018 Government responses to PAC reports 43-58 Cm 9702 December 2018 Government responses to PAC reports 59-63 Cm 9740 January 2019 Government responses to PAC reports 64-68 CP 18 March 2019 Government responses to PAC reports 69-71 CP 56 April 2019 Government responses to PAC reports 72-77 CP 79 May 2019 Government responses to PAC reports 78-81 and 83-85 CP 97 June 2019 Government responses to PAC reports 82, 86-92 CP 113 July 2019 Government responses to PAC reports 93-94 and 96-98 CP 151 October 2019 Government responses to PAC reports 95, 99-111 CP 176 January 2020 Government response to PAC reports 112-119 [1 and 2] CP 210 Session 2016-17 Committee Recommendations: 393 Recommendations