Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Accepted
Inconsistent presentation of data between years, and lack of reflection of current Government policies and...
Recommendation
Inconsistent presentation of data between years, and lack of reflection of current Government policies and economic context, reduce the usability of the Whole of Government Accounts. The 2019–20 WGA presented some important trend analysis within the Performance Report; an aspect of the WGA reporting that we welcome. However, in some areas there has been a lack of consistency when it comes to how this information is presented. For example, analysis of liabilities had previously been presented in a pie chart but is now presented in a bar chart. Maintaining consistent presentation of data year-on-year makes it easier to compare information over time. Given the unique perspective the WGA offers across public finances, the Treasury should ensure that comparison across years and across reports is simple and unambiguous. The Performance Report could also be improved by developing its commentary to reflect developments in the public sector and financial landscapes since the reporting date, which can be significant given the timeframe for WGA publication. Issues such as the impact of inflation on budgets, spending and pay reviews, if suitably reflected, could expand the functionality of the WGA. The Treasury should also ensure commentary on key targets, such as capital receipts on property disposals, include current targets and proposals to keep the WGA current despite publication delays. Recommendation: The Treasury should ensure that analysis in the WGA supports comparability and reflects developments since the reporting date such as the impact of high inflation. Whole of Government Accounts 2019–20 7
Government Response Summary
The government agrees to ensure that analysis in the WGA supports comparability and reflects developments since the reporting date, by building on trend data, reflecting topical interests, following best practices in data presentation, and including commentary to reflect developments in the public sector and financial landscapes since the reporting date, while balancing change and continuity, and reflecting the impact of inflation in the WGA Statement of Revenue and Expenditure.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. report, and made several improvements to the WGA performance report in 2019-20, including additional trend data. The WGA performance report includes 5-year trend data for many accounts areas and the department will build on this to ensure comparative data is presented as effectively as possible, to enhance the useability of the accounts. WGA will continue to reflect areas of topical interest, follow best practice in the presentation of data, and include commentary to reflect developments in the public sector and financial landscapes since the reporting date. There is a balance to be struck between change and continuity, so where presentational changes are made the Treasury will provide clear prior year data to aid comparability. The impact of inflation will be reflected in the WGA Statement of Revenue and Expenditure in the following years, insofar as it affects in-year expenditure. Projections for future expenditure are included in the performance report, by drawing upon the forecasts of the Office for Budget Responsibility. In terms of the WGA balance sheet, inflation can affect the amount that will need to be paid regarding certain liabilities, as one of a number of factors. As required by accounting standards, the financial statements disclose the sensitivity to certain risks which can include inflation and rates of salaries, depending on the nature of the specific liability. For example, WGA disclosures show the sensitivity of the clinical negligence provision to inflation, and sensitivity of unfunded pension liabilities to changes in salaries.