MPs on the Public Administration and Constitutional Affairs Committee (Pacac) have launched an inquiry into whether government accounting practices are up to the job.
Pacac, chaired by Tory MP Bernard Jenkin, said the government spent “considerable amounts of money” producing and auditing a range of accounts both for internal use and external scrutiny by parliament, even though their value was questionable.
“The published accounts are used by ministers more to promote the government’s own achievements, than to provide useful tables of figures and information,” they said in their call for evidence. “It is not clear that they are of any use to select committees, or to the public, in holding the government to account.”
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Committee members said “numerous reviews” over the past decade had identified poor management information and management accounts as a factor in bad decision-making within departments.
The inquiry will look at the “format and utility” of the monthly management accounts used by ministers, permanent secretaries and departmental boards, as well as the departmental accounts put out for public consumption.
Its terms of reference indicate a list of areas of interest, including ways permanent secretaries and departmental boards are able to use management accounts as a tool to examine the functions of the department they are charged with running.
Other areas of interest include the extent to which government accounts should be standardised, and who should have control over the format of departmental accounts and whole-of-government accounts.
Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, warned last year in Civil Service World that while the UK had “exceptionally strong accounts” for reporting previous years’ spend, the information was not used well enough to plan future financial arrangements.
“The weakness we have at the moment is that we describe the past in accounting terms, but the future in terms of policy direction and likely fiscal impact, underpinned by statistics and not accounts-grade information,” he said.
Pacac’s call for evidence on accounting procedure is open until April 29.