Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
The Treasury explained to us how the WGA plays a crucial role in enhancing the...
Recommendation
The Treasury explained to us how the WGA plays a crucial role in enhancing the fiscal transparency of the public sector, giving a more complete and overarching view of government spending and the public financial structure that exists elsewhere. This in turn allows, over the years, for identification of major economic trends and better fiscal management. The content and quality of the reporting in the WGA, beyond the financial statements themselves, is what controls the level of transparency achieved.57 The Treasury has succeeded in advancing the content of its reporting in 2019–20 to include valuable overviews of the wider government impacts and actions surrounding both the COVID-19 pandemic and EU Exit.58 The Treasury highlighted how information on sustainability and net zero targets has also been included in the WGA for the first time, although they acknowledged that the information reported is brief, with limited detail. Advancements in reporting on areas such as this would work to heighten the transparency of reporting and provide a more comprehensive financial backdrop for fiscal management. We are pleased that the Treasury sees this as only the beginning of its reporting on these issues and intends to build upon this in future publications.59
Government Response Summary
The government agrees to continue improving the content of the WGA, including spending on net zero, government emissions, fraud across government, long term costs of COVID interventions and inclusion of the equivalent of a viability statement, with a target implementation date of July 2023.
Government Response
Accepted
HM Government
Accepted
5. PAC conclusion: The content of the Whole of Government Accounts has improved but does not transparently report against all key areas of government spending. 5. PAC 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 5.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2023 5.2 The Whole of Government Accounts (WGA) financial statements are, like any other 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. 5.3 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. 5.4 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. 5.5 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. 5.6 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. 5.7 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.