Parliament’s Public Accounts Committee has called on the Treasury to set out how it can get publication of the groundbreaking Whole of Government Accounts back on track after double blows from the pandemic and the crisis in local government audit.
MPs said the latest instalment of the UK’s annual public-spending snapshot was of “decreasing usefulness and reliability” to parliament, local government, and the public because of its late publication and “patchy information”.
The most up-to-date WGA – which covers 2020-21 – was published in July last year, 27 months after the financial year it relates to: the biggest lag in the 14-year history of the dataset. The Treasury’s target for the WGA is to publish it no more than 15 months after the end of the relevant financial year.
Although the latest accounts bring together £1.063tn in spending from more than 10,000 public-sector organisations, MPs also criticised an “unacceptable” rise in missing data. They said 155 organisations had not submitted data for the 2020-21 WGA, among them two pension schemes with liabilities of £86.9bn and £48.2bn.
MPs acknowledged that some of the WGA delays are the result of the continuing of impacts from Covid-19, as government departments continue to work to catch up. But they also pointed to “significant impacts” from delays in the production of local government accounts that are made worse by the ongoing local audit crisis.
The PAC said the lack of sufficient local audit capacity had knock-on effects on central government departments' ability to complete their accounts on time.
The report said delays to assurance on the accounts of the Local Government Penson Scheme had added four-to-five months to the timescale for certifying the accounts of Ministry of Justice and the Department for Digital, Culture, Media and Sport.
It added that the Department of Health and Social Care’s accounts had faced delays because of the failure of a local audit supplier to complete the necessary work.
Committee chair Dame Meg Hillier said that as an overall snapshot of the nation’s finances, the WGA had the potential to be an essential resource for decision makers and scrutineers.
“The Treasury had made great progress on delivering this in a timely fashion but the delays in this report take us back years,” she said.
“The Treasury needs to be far more front-footed in curating the WGA and following up with public bodies where data is missing.”
Hillier added that the report underscored the PAC’s continued warnings over the state of local government finance and the risks it posed to central government.
“Performance in this area had continued to deteriorate at the time of our report, and a credible plan must be urgently implemented if we are to prevent the rot continuing to spread,” she said.
As part of their recommendations, MPs called on the Treasury to explain how it is working at a senior level with the Department for Levelling Up, Housing and Communities, and the Financial Reporting Council to ensure there is a credible plan to resolve the local audit crisis. The committee gave the department until the end of next month to respond.
PAC added that stakeholders, including the Institute of Chartered Accountants in England and Wales, had commented that the inclusion of unaudited data in the WGA would be more helpful than missing figures.
MPs said the Treasury needed to engage with public sector organisations to find out why they had not submitted data to the WGA. They added that bodies should be required to submit draft data if audited data was not available and called on the Treasury to identify “appropriate consequences” for organisations that do not submit required data.
Elsewhere in the report, PAC said that the government had no clear plan for tracking ongoing Covid costs or evaluating Covid support schemes in the longer term – such as the 20-year timeframe for culture-sector loans.
MPs said it was “essential” that government learned from its response to the pandemic, and called on the Treasury to provide a compendium of evaluation of Covid schemes from across government by July this year.
The Treasury said it would respond to the PAC report in due course.