Source · Select Committees · Public Accounts Committee
Twentieth Report - Whole of Government Accounts 2019–20
Public Accounts Committee
HC 31
Published 14 October 2022
Recommendations
2
Accepted
Poor design and testing of OSCAR II caused significant delays to the Whole of Government...
Recommendation
Poor design and testing of OSCAR II caused significant delays to the Whole of Government Accounts. In July 2020 the Treasury replaced its now obsolete IT system with a new system, OSCAR II, used for collecting and consolidating data from …
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Government Response Summary
The Treasury has undertaken a number of lessons learned exercises, including engaging the Government Internal Audit Agency to support this work and changed its practices for project managing changes to the system.
HM Treasury
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3
Accepted
Failures in the local audit market in England and Wales are resulting in poorer quality...
Recommendation
Failures in the local audit market in England and Wales are resulting in poorer quality data for Central Government to use in oversight, and in preparing the Whole of Government Accounts. Before the pandemic, the Local Government audit sector was …
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Government Response Summary
The Treasury will centrally carry out assurance work over data submissions that are below the audit threshold (across all sectors) and is obtaining further specialist assurance advice on how to enhance the efficiency and effectiveness of the assurance procedures for WGA.
HM Treasury
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4
Accepted
Inconsistent presentation of data between years, and lack of reflection of current Government policies and...
Recommendation
Inconsistent presentation of data between years, and lack of reflection of current Government policies and economic context, reduce the usability of the Whole of Government Accounts. The 2019–20 WGA presented some important trend analysis within the Performance Report; an aspect …
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Government Response Summary
The government agrees to ensure that analysis in the WGA supports comparability and reflects developments since the reporting date, by building on trend data, reflecting topical interests, following best practices in data presentation, and including commentary to reflect developments in the public sector and financial landscapes since the reporting date, while balancing change and continuity, and reflecting the impact of inflation in the WGA Statement of Revenue and Expenditure.
HM Treasury
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5
Accepted in Part
The content of the Whole of Government Accounts has improved but does not transparently report...
Recommendation
The content of the Whole of Government Accounts has improved but does not transparently report against all key areas of government spending. The issues that are of greatest interest to users of the WGA, including the Committee, evolve over time. …
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Government Response Summary
HM Treasury will continue to improve the content of WGA, to ensure it brings together the best available published information on topics of interest but considers that adding too many disclosures might make reporting complex and unwieldy, therefore consideration will be given to ensuring that WGA provides the most effective commentary on the financial statements presented and associated issues.
HM Treasury
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6
Rejected
Government has not yet set out the consequences of announced Civil Service staffing reductions.
Recommendation
Government has not yet set out the consequences of announced Civil Service staffing reductions. In May 2022, the government announced that it intends to cut 91,000 jobs from the civil service over the next three years. The 2021 Spending Review …
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Government Response Summary
The government rejects the recommendation to prepare a costed plan based on proposed staffing reductions across government, stating that they will not be publishing a full plan to deliver the previously proposed Civil Service staffing reductions, and will instead focus on departmental efficiency and savings reviews.
HM Treasury
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8
Acknowledged
Throughout the course of the 2019–20 accounts preparation process, the Treasury repeatedly underestimated how long...
Recommendation
Throughout the course of the 2019–20 accounts preparation process, the Treasury repeatedly underestimated how long it would take to produce the WGA; missing both 11 Public Accounts Committee, Report of session: Whole of Government Accounts 2018–19, 22 January 2021 12 …
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Government Response Summary
The Treasury is revisiting the timetable for the 2020-21 account and future cycles in light of the causes of the delays both this year and for 2019-20, and will write to the Committee setting out a long term recovery strategy that is realistic.
HM Treasury
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9
Acknowledged
The Treasury has laid out its aims for delivery of the 2020–21 and 2021–22 accounts,...
Recommendation
The Treasury has laid out its aims for delivery of the 2020–21 and 2021–22 accounts, setting target dates for publication of March 2023 and November 2023 respectively. This gives the Treasury less than 10 months from publication of the 2019–20 …
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Government Response Summary
The government agrees with the Committee’s recommendation, acknowledging the unlikelihood of achieving the planned March 2023 publication date and stating they are revisiting the timetable and will write to the Committee with a long term recovery strategy.
HM Treasury
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10
Accepted
In July 2020 the Treasury launched its new financial IT system, OSCAR II, for use...
Recommendation
In July 2020 the Treasury launched its new financial IT system, OSCAR II, for use in preparing the WGA. OSCAR II replaced the previous, obsolete system and was designed to support, amongst other functions: the collection and consolidation of data …
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Government Response Summary
The government agrees to undertake a lessons-learnt exercise addressing the root causes of poor design specification and testing of OSCAR II, and ensure identified improvements are implemented when applying future system changes.
HM Treasury
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11
Accepted
However, during the implementation of OSCAR II, a number of significant problems arose.
Recommendation
However, during the implementation of OSCAR II, a number of significant problems arose. The problems, which were not localised but were encountered across the system’s different functionalities, included: issues faced by component bodies when attempting to submit their data to …
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Government Response Summary
The Treasury has undertaken a number of lessons learned exercises, including engaging the Government Internal Audit Agency to support this work, and is applying the lessons learned in deciding on the future support and development arrangements for the system.
HM Treasury
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12
Accepted
The Treasury has told us that that all known issues with OSCAR II have now...
Recommendation
The Treasury has told us that that all known issues with OSCAR II have now been resolved as they move onto the production of the 2020–21 WGA. However, the Treasury informed us that it anticipates that there are likely to …
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Government Response Summary
The Treasury has changed its practices for project managing changes to the OSCAR II system and is negotiating a new plan with Deloitte. They are applying lessons learned in deciding on future support arrangements, with the existing contract due to end in November 2023.
HM Treasury
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13
Accepted
The Local Government audit sector in England and Wales has been under significant strain for...
Recommendation
The Local Government audit sector in England and Wales has been under significant strain for a number of years. There is a shortage of auditors with the knowledge and experience to deliver, within the expected timeframes, the high-quality audits required …
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Government Response Summary
The Treasury will centrally carry out assurance work over WGA data submissions that are below the audit threshold and is obtaining further specialist assurance advice on how to enhance the efficiency and effectiveness of the assurance procedures for WGA.
HM Treasury
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14
Accepted
The Treasury explained that the decision was made to prepare the WGA using unaudited data...
Recommendation
The Treasury explained that the decision was made to prepare the WGA using unaudited data from these bodies as a trade-off between timeliness and completeness. The Treasury told us that it waited for the audits of all the largest bodies …
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Government Response Summary
The government agrees to ensure the data in OSCAR II will remain of sufficient quality by centrally carrying out assurance work over data submissions that are below the audit threshold and by obtaining further specialist assurance advice on how to enhance the efficiency and effectiveness of the assurance procedures for WGA.
HM Treasury
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16
Accepted
There are several factors that contribute to maximising the usability of the WGA for the...
Recommendation
There are several factors that contribute to maximising the usability of the WGA for the public and other stakeholders. We discussed with the Treasury how creating successive sets of accounts which are presented in a consistent and comparable way enables …
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Government Response Summary
The government agrees to ensure that analysis in the WGA supports comparability and reflects developments since the reporting date such as the impact of high inflation. They will build on the existing 5-year trend data and ensure comparative data is presented as effectively as possible, reflecting areas of topical interest and following best practice in presentation.
HM Treasury
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17
Accepted
In the 2019–20 WGA, the Treasury presented some important trend analysis within the Performance Report...
Recommendation
In the 2019–20 WGA, the Treasury presented some important trend analysis within the Performance Report on income and expenditure, as well as assets and liabilities.47 This is an aspect of the WGA reporting that we welcome as an incredibly useful …
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Government Response Summary
The Treasury will build on the WGA performance report to ensure comparative data is presented as effectively as possible, to enhance the useability of the accounts, and provide clear prior year data to aid comparability where presentational changes are made.
HM Treasury
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18
Accepted
Another factor to consider in elevating the usability of the WGA is the way in...
Recommendation
Another factor to consider in elevating the usability of the WGA is the way in which current Government policies and economic context are reflected in its reporting; currently such context is lacking. The Treasury has invited our thoughts on how …
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Government Response Summary
The Treasury will build on the WGA performance report to ensure comparative data is presented as effectively as possible, to enhance the useability of the accounts, and provide clear prior year data to aid comparability where presentational changes are made.
HM Treasury
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19
Accepted
The Treasury explained to us how the WGA plays a crucial role in enhancing the...
Recommendation
The Treasury explained to us how the WGA plays a crucial role in enhancing the fiscal transparency of the public sector, giving a more complete and overarching view of government spending and the public financial structure that exists elsewhere. This …
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Government Response Summary
The government agrees to continue improving the content of the WGA, including spending on net zero, government emissions, fraud across government, long term costs of COVID interventions and inclusion of the equivalent of a viability statement, with a target implementation date of July 2023.
HM Treasury
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20
Accepted
The Treasury expressed its understanding of how the issues that are of greatest interest to...
Recommendation
The Treasury expressed its understanding of how the issues that are of greatest interest to users of the WGA, including the Committee, evolve over time. The Treasury told us that where users of the WGA continue to rely on the …
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Government Response Summary
The government agrees to continue improving the content of the WGA, including spending on net zero, government emissions, fraud across government, long term costs of COVID interventions and inclusion of the equivalent of a viability statement, with a target implementation date of July 2023.
HM Treasury
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21
Accepted
The Treasury currently uses the NAO’s COVID-19 Cost Tracker to provide data for its reporting...
Recommendation
The Treasury currently uses the NAO’s COVID-19 Cost Tracker to provide data for its reporting on COVID-19 in the WGA. However, the NAO is set to cease publishing this information in the near future and it is therefore important that …
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Government Response Summary
HM Treasury will continue to improve the content of WGA, to ensure it brings together the best available published information on topics of interest, incorporating public updates into the WGA performance report.
HM Treasury
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22
Accepted
Improvements to the transparency of information in the WGA would also be achieved through more...
Recommendation
Improvements to the transparency of information in the WGA would also be achieved through more detailed narrative in certain areas. The asset and liability split reported in the WGA shows total assets of £2,138.5 billion and total liabilities of £4,972.7 …
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Government Response Summary
HM Treasury will continue to improve the content of WGA, to ensure it brings together the best available published information on topics of interest, incorporating public updates into the WGA performance report.
HM Treasury
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23
Rejected
In May 2022, the government announced its intention to cut 91,000 jobs from the civil...
Recommendation
In May 2022, the government announced its intention to cut 91,000 jobs from the civil service over the next three years, with the aim of returning to 2016 staffing levels.70 The 2021 Spending Review had already confirmed the need for …
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Government Response Summary
The government disagrees with the recommendation to prepare a clearly articulated and costed plan based on proposed staffing reductions across government, because they have moved away from top-down headcount reduction targets.
HM Treasury
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24
Rejected
Staff cuts will inevitably involve a quantity of associated costs, including redundancy costs, that the...
Recommendation
Staff cuts will inevitably involve a quantity of associated costs, including redundancy costs, that the government will have to pay out. We questioned the Treasury as to what the total cost of these payments was likely to be, and although …
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Government Response Summary
The government disagrees with the recommendation to prepare a clearly articulated and costed plan based on proposed staffing reductions across government, because departments should look for the most effective ways to secure value and maximise efficiency within budgets.
HM Treasury
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Conclusions (6)
1
Conclusion
Acknowledged
Based on the Whole of Government Accounts (WGA) for the year ended 31 March 2020, we took evidence from HM Treasury (the Treasury) on 8 June 2022.1 The WGA is a unique document which provides the most complete and accurate picture available of the UK public sector finances.2 It is …
Government Response Summary
The Treasury is revisiting the timetable for the 2020-21 account and future cycles and will write to the Committee setting out a long term recovery strategy to strengthen discipline within the system and investing in specialist project management support and increasing the size of the WGA team.
7
Conclusion
Acknowledged
Timeliness is essential when gathering high-quality data needed to produce useful information; delays reduce the value and transparency of information in the WGA and diminish its potential to generate valuable insights.17 The published accounts are an important source for key stakeholders including Parliament, and major fiscal bodies such as the …
Government Response Summary
The Treasury is revisiting the timetable for the 2020-21 account and future cycles in light of the causes of the delays both this year and for 2019-20, and will write to the Committee setting out a long term recovery strategy that is realistic.
15
Conclusion
Accepted
This problem is expected to escalate further as the Treasury look towards the 2020– 21 WGA. The proportion of 2020–21 Local Government audits that had been completed by the target date of 20 September 2021 dropped again from 45% in 2019–20 to just 9%.43 In advance of the 2020–21 WGA …
Government Response Summary
The government agrees with the recommendation to ensure the data in OSCAR II will remain of sufficient quality. They state WGA data submissions are prepared based on component entity’s audited accounts where published, and entities above a certain size are also required to have their WGA data submission audited. The Treasury will centrally carry out assurance work over data submissions that are below the audit threshold.
25
Conclusion
Rejected
This scale of these proposed cuts has the potential to bring about significant consequences for service delivery, both in regard to the quality and efficiency of delivery and the range of services it will be possible to provide. At the time we took evidence, the Treasury said that no work …
Government Response Summary
The government disagrees with the committee's recommendation. The Prime Minister has confirmed that, rather than a top-down headcount reduction target, departments should look for the most effective ways to secure value and maximise efficiency within budgets. They will not be publishing a full plan to deliver the previously proposed Civil Service staffing reductions.
26
Conclusion
Rejected
The Treasury told us that at this stage the challenge of how best to achieve these reductions is in the hands of individual departments. It explained that each department is itself best placed to understand the resourcing requirements needed to deliver its service programmes and objectives. It told us that …
Government Response Summary
The government disagrees with the premise, stating the Prime Minister has confirmed that departments should look for the most effective ways to secure value and maximise efficiency within budgets, rather than top-down headcount reduction targets.
27
Conclusion
Rejected
We discussed with the Treasury that one way in which headcount reductions might be accomplished whilst at the same time maintaining the scope and standard of service delivery, is by way of increased digitisation. By digitalising services, the required level of staffing is reduced, and cuts can be made in …
Government Response Summary
The government disagrees with the committee's recommendation. The Prime Minister has confirmed that, rather than a top-down headcount reduction target, departments should look for the most effective ways to secure value and maximise efficiency within budgets. They will not be publishing a full plan to deliver the previously proposed Civil Service staffing reductions.