Source · Select Committees · Public Accounts Committee
Recommendation 31
31
Accepted
OBR projections indicate public debt will triple within 50 years, necessitating policy changes.
Conclusion
We challenged the Treasury on how seriously it is taking the sustainability of government finances, to which it stated that it was taking the matter very seriously. It commented that the OBR’s fiscal sustainability report includes a 50–year forecast and looks at what happens if everything stays the same. Based on current policy and the latest demographic projections, the OBR estimate public debt is projected to almost triple from under 100% of GDP to over 270% of GDP over the next 50 years.68 The main takeaway from that–given the issues of an ageing population, demands on healthcare, and climate damage – being that some things are going to have to be done differently.69
Government Response Summary
The government agrees with the committee and plans to include long-term trend information from 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.