Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted in Part
The content of the Whole of Government Accounts has improved but does not transparently report...
Recommendation
The content of the Whole of Government Accounts has improved but does not transparently report against all key areas of government spending. The issues that are of greatest interest to users of the WGA, including the Committee, evolve over time. For example, the 2019–20 WGA includes reporting on sustainability and net zero targets, although the information included is brief, with limited detail – the Treasury plans to build on this going forwards. Providing a more comprehensive assessment of the impact of the pandemic on the level of fraud and error against the government should be a focus going forwards, for example by including estimates of NHS procurement fraud. The Treasury currently includes data from the COVID-19 Cost Tracker produced by the NAO in the WGA. However, it should not depend on the NAO to continue reporting this information; and should develop and use its own assessment of these costs. Improvements to the transparency of information in the WGA would be achieved through more detailed narrative in certain areas. The asset and liability split reported in the WGA, in a commercial organisation, would indicate that it is insolvent, and the Treasury could better explain why this is not the case in the context of the Government’s ability to raise future funds through taxation and borrowing. Recommendation: The Treasury should continue to improve the content of the WGA, with specific reference to the following: • Spending on net zero • Government emissions • Fraud across government • Long term costs of COVID interventions • Inclusion of the equivalent of a viability statement
Government Response Summary
HM Treasury will continue to improve the content of WGA, to ensure it brings together the best available published information on topics of interest but considers that adding too many disclosures might make reporting complex and unwieldy, therefore consideration will be given to ensuring that WGA provides the most effective commentary on the financial statements presented and associated issues.
Government Response
Accepted in Part
HM Government
Accepted in Part
The government agrees with the Committee’s recommendation. audited set of accounts, a record of past financial performance, and give an assessment of the balance sheet at a defined point in time in the past. HM Treasury will continue to improve the content of WGA, to ensure it brings together the best available published information on topics of interest. However, consideration will be given to ensuring that WGA provides the most effective commentary on the financial statements presented and associated issues. The Treasury must also be mindful that adding too many disclosures might make reporting complex and unwieldy. The Treasury will bring in relevant published information where appropriate, but WGA is not the most suitable place for detailed discussion of policy. In addressing the request for a viability statement the WGA commentary will make clear that, in line with accounting standards, WGA recognises certain liabilities but not a corresponding asset to reflect the government’s ability to fund these liabilities through future taxation. The performance report will continue to draw upon forecasts of the Office for Budget Responsibility to provide insights into the overall fiscal position. Central government emissions data is consolidated in the Greening Government Commitments (included in WGA 2019-20). The extent to which future WGA publications may be able to collate emissions data from individual component annual reports and accounts will depend on the development of the reporting frameworks across the jurisdictions of the UK public sector. In the near term, the Treasury will look to enhance reporting in WGA on emissions and spending on net zero using existing data sources. The Treasury has committed to conducting a routine review of the costs of COVID-19, where there have been material changes that can reliably be attributed to COVID-19, and to provide public updates. These updates will be incorporated into the WGA performance report, alongside information from departmental annual reports and accounts and other publications. The Public Sector Fraud Authority publishes fraud and error losses for departments and their ALBs, and the total estimated fraud cost to government in the Fraud Landscape Report. Following the release of an updated Fraud Landscape report, these figures will be included WGA 2020-21. The Climate Change Committee (CCC) has a statutory duty to monitor and report on progress made in reducing emissions and published the first Progress Report in June 2022. The Department for Business, Energy and Industrial Strategy (BEIS) will respond to the CCC’s recommendations and outline progress against a set of key indicators for achieving the UK’s climate goals in Spring 2023. Information from these sources will be brought into WGA 2020- 21.