The Treasury's flagship effort to give a more accurate picture of the public finances risks getting ignored amid a flurry of other publications, a major professional accountancy body has warned.
The Whole of Government Accounts (WGA) brings together the audited accounts of more than 5,500 public sector organisations, in a bid to give parliament and the public a comprehensive picture of the financial state of the public sector. The accounts are drawn up according to International Financial Reporting Standards (IFRS), with independent scrutiny from the National Audit Office (NAO) spending watchdog and MPs on the Public Accounts Committee.
But this year's publication was held up because of problems with the financial statements of the Department for Education, caused by the department's ongoing battle to incorporate academy school accounts into its own statements – and the document was finally published in full at the end of last week, just before the parliamentary recess.
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Among other information, the latest WGA shows that that the shortfall between public sector net income and expenditure increased by £6.3bn to £152bn in 2014-15, owing mainly to increased liabilities for nuclear and oil and gas field decommissioning and the impact of the so-called "triple lock" on state pensions.
According to the WGA, the government received £659.3bn in 2014-15 from taxes and other income, and spent £733.9 on providing services and covering running costs. That figure includes the cost of social security payments and employing public sector staff.
Meanwhile, the inclusion of the recently-reclassified Network Rail and the Pension Protection Fund into the Whole of Government Accounts has seen government's total assets increase by £93.6bn, with liabilities increasing by £80.2bn.
But while the Association of Chartered Certified Accountants (ACCA) – a professional body representing more than 170,000 accountants around the world – has welcomed an improvement in the quality of information provided by the WGA, it has questioned the way publication of the document was handled by the Treasury.
“It is vital that this important financial data does not get lost in the noise" – Association of Chartered Certified Accountants
The ACCA's head of policy, Anthony Walters, said: “This is one of the largest consolidated set of government accounts globally comprising of more than 5,500 government entities including local government, central government, health and education and public corporations. It’s therefore disappointing that the planned timescales to deliver the WGA have slipped and it has been pushed out in the pre-recess rush.”
Walters added that the WGA represented a "rich source of audited financial data", which offered the opportunity to scrutinise the impact of policy on the UK's finances.
But he warned: "The challenge remains to encourage politicians, policy makers and all others with a stake in our public finances to make greater use of the WGA. We welcome the efforts made by the government to make this data more accessible. But more needs to be done to raise awareness of the WGA and its contents and to ensure that the timescales for releasing the annual reports do not drift.
“It is vital that this important financial data does not get lost in the noise; it’s there to be used and to drive transparency and scrutiny in the way in which public finances are deployed and managed.”
Amyas Morse, the head of the NAO (pictured), also cast his verdict on the latest WGA, saying there was "no more complete record of what the government spends, receives, owns and owes" and praising the use of more complete and accurate information.
But he added: "The WGA could, however, be a more powerful tool for understanding the public finances. It provides a unique perspective because of its reach and approach to measuring the government’s financial performance and position.
"Better analysis by the Treasury of the nature of the assets across the government’s portfolio, the extent and sources of liabilities and the financial risks it is exposed to, will help parliament and the public to understand better the full range of the government’s financial commitments and its approach to managing them."
"Promote the government’s own achievements"
The NAO last month warned that the DfE's attempts to bring the more than 4,500 centrally funded academy schools into its own accounts was leading to "material and pervasive" problems with its financial statements.
The latest WGA acknowledges the knock-on effect of the DfE's accountancy troubles on the wider government financial report, saying: "The 2014-15 consolidated accounts for the Department for Education were delayed in their production. This has had a consequential impact on the publication date for the 2014-15 WGA."
And the WGA says the Treasury is working with DfE "to address this issue for future publications".
MPs on the Public Administration and Constitutional Affairs Committee are currently part-way through an inquiry into whether government accounting practices are up to the job, with committee chair Bernard Jenkin warning that some published accounts were used "more to promote the government’s own achievements, than to provide useful tables of figures and information".
Rob Whiteman, chief executive of the Chartered Institute of Public Finance and Accountancy, meanwhile told Civil Service World last year that the UK had “exceptionally strong accounts” for reporting previous years’ spend – but was not making good enough use of accounting information to plan future spending.
“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.