Source · Select Committees · Public Accounts Committee
Recommendation 33
33
Accepted
Significant WGA deficit in 2022-23 highlights urgent need for a long-term fiscal strategy.
Conclusion
Written evidence we received from the ICAEW stressed that, in the absence of discount rates noted in earlier sections, the UK government had a deficit of £200 billion in 2022–23. The ICAEW noted that this deficit is more than 20% of the revenue the UK government received in 2022–23 (£975 billion) and that this deficit is greater than that reported in the National Accounts (£77 billion), as the WGA includes longer term financial liabilities that the government incurs. It stressed the need for a long–term fiscal strategy to put the public finances on a sustainable path.71 Evidence from Professor David Heald argued that the WGA does not appear to be central to 66 Q 79 67 Qq 79–80 68 Public debt projected to exceed 270 per cent of GDP by the mid-2070s - Office for Budget Responsibility 69 Q 81 70 Q 82 71 WGA0003 18 Treasury thinking when it comes to fiscal policy, despite some of the written statements in the WGA. Professor Heald also provided commentary on the relevance of, and implications for, the WGA in the context of the new fiscal rules recently announced by The Chancellor.72 72 WGA0002 19
Government Response Summary
The government agrees with the committee 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.