Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
Multiple economic shocks and demographic pressures strain UK public finances, risking unsustainable debt.
Conclusion
The WGA highlights the succession of economic shocks that the UK has been affected by in recent years, straining public finances.64 The accounts detail several specific risks to the UK’s public finances going forward. These include costs of resolving, mitigating and adapting for climate change damage, including flooding and coastal erosion. Additionally, health spending is expected to increase in future years, resulting in an increase to public sector debt. Demographic pressures and geopolitical pressures are also expected to pressure public finances in the next fifty years putting the UK’s public debt on an unsustainable trajectory, on the basis of policy at the Spring budget in March 2024 and in the absence of policy action to mitigate the rise in debt.65 60 Q 14 61 WGA0003; WGA 2022–23 p244 62 Q 68 63 Q 68 64 WGA 2022–23 p37 65 WGA 2022–23 p37 17
Government Response Summary
The government agrees and plans to include long-term trend information back to the first published WGA in the 2023-24 WGA, with a target implementation date of July 2025.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2025 6.2 The WGA is a valuable source of information on government liabilities, providing a 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.