Source · Select Committees · Public Accounts Committee
Recommendation 2
2
The Whole of Government Accounts (WGA) has received a disclaimed audit opinion for two consecutive...
Conclusion
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.
Government Response
Response Pending
HM Government
Response Pending
The government agrees with the Committee’s recommendation. Recommendation implemented The Ministry of Housing, Communities and Local Government (MHCLG) has written to the Committee alongside the Treasury Minute with the information requested. While it is a decision for the C&AG to issue a disclaimed audit opinion for the WGA, the government considers that there are clear indications that the position relating to local audit will improve over the next two to three years. The local audit backstop programme continues to make significant progress on restoring the discipline needed for timely publication of both unaudited and audited accounts, and the latest update to the local audit non-compliance lists following the backstop in February 2026 shows that the proportion of bodies publishing audit opinions on time is increasing each year. The government will continue its engagement with local bodies to ensure that outstanding audited accounts are published as soon as practicable. The government agrees with the Committee’s recommendation types of missing data within the WGA. While it may not always be possible to distinguish between non-submission due to incapacity or deliberate non-compliance for all entities, the Treasury will endeavour to provide as much relevant information as possible to support users’ understandings – for example, since receiving the disclaimed audit opinion, the Treasury has expanded its analysis of the number of missing entities to cover a wider range of years. Since receiving the disclaimed audit opinion, the Treasury has expanded its analysis of the number of missing entities to cover a wider range of years. For the first time, this includes information on the breakdown of missing data over time and patterns of submission and re- entry, enabling users to identify persistent and systemic issues as well as areas for improvement. The WGA also provides a more detailed sectoral and geographical breakdown of missing data. This highlights where non-submission is concentrated and allows clearer interpretation of the underlying causes – for example, the concentration of missing data in local government reflecting the wider sectoral audit issues, compared to areas where the reasons for missing data are less readily explained. The Treasury will continue to keep under review how further information might be incorporated into future WGA publications to enhance transparency and build on the strengthened disclosures now in place.