Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Accepted
WGA discount rate adjustments obscured the actual increase in nuclear decommissioning costs.
Conclusion
The WGA includes several large provisions which change substantially from year to year. For example, the provision for future decommissioning of nuclear facilities has decreased by £126.2 billion from £273.1 billion in 2021–22 to £146.9 billion in 2022–23, with the discount rate decreasing the provision by £131.8 billion.53 We subsequently discovered that the forecast cost to the taxpayer of nuclear decommissioning had actually increased by £11.7 billion in the year 2022–23 , despite the impression given by the figure in the accounts that it had reduced substantially.54 The cost also increased by a further £10.3 billion in 2023–24.55
Government Response Summary
The government agrees to improve the 2023-24 WGA performance report by publishing undiscounted data, including long-term trend analysis of significant assets and liabilities, and reviewing the presentation of discount rate information (July 2025).
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Target implementation date: July 2025. One of the important principles of WGA is that it summarises and presents information already in the public domain. It is correct that departmental accounts should be the first place where information relevant to departmental finances are published, with WGA acting as an opportunity to aggregate, summarise and analyse trends. Where undiscounted data is available it will be published in the WGA performance report. The 2023-24 WGA performance report will include long term trend analysis of significant assets and liabilities. Where possible updates on how government seeks to manage liabilities will be provided. Linkages between discount rate information in different parts of the Performance Report and Accounting Notes will be reviewed in the 2023-24 WGA to streamline the content. Accounting standards require disclosure of significant assumptions and sensitivities as part of the notes to the financial statements. These include sensitivity analysis for other key assumptions: rate of increase in pensions, rate of increase in salaries or life expectancy in retirement.