Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
Outline how WGA disclosures will be updated to ensure long-term financial risks are transparent
Conclusion
The WGA is not sufficiently focused on long–term financial risk. One purpose of the WGA is to provide a comprehensive picture of the UK’s public sector finances and inform more effective management of fiscal risks. The WGA 2022–23 includes narrative on the fiscal risks published in the OBR’s Fiscal Risks and Sustainability report. In particular, it highlights risks posed by climate change, rising health spending, and geopolitical tensions which are projected to increase pressures on the public finances. The OBR’s report also notes that public sector net debt is expected to almost treble over the next 50 years if current trends continue. However, the WGA does not put this challenge into the context of the current government spending, liabilities and commitments reporting in the WGA or provide the information necessary to allow stakeholders to understand the extent of financial challenges for the UK. recommendation The Treasury should outline how the WGA disclosures will be updated to ensure the long–term financial risks are more transparent and how the information in the WGA will be used to make such improvements. 7 1 Missing and unaudited data Introduction
Government Response Summary
The government agrees and will focus on including long-term trend information, dating back to the first published WGA, in the 2023-24 WGA to improve transparency on long-term financial risks.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. comprehensive picture across the whole public sector. There are other similarly valuable sources of information such as departmental accounts, or the fiscal sustainability and risk updates provided by the OBR. The intent is to provide useful information on the evolution of key balances over a long period. The accounting rules that underpin WGA are generally retrospective, focussing on the current valuation of future liabilities as at the respective balance sheet date. Under these accounting rules it is not possible to forecast future balance sheets, but other publications such as the ONS Public Sector Net Worth statistics provide this information on a statistical rather than accounting basis. WGA seeks to improve by summarising relevant information from these other publications. For the 2023-24 WGA the focus will be to include long term trend information back to the first published WGA.