Whitehall too slow taking up resource accounting

7 Apr 05
Government departments are not implementing resource accounting and budgeting systems properly to ensure they are delivering value for money, senior MPs have warned.

08 April 2005

Government departments are not implementing resource accounting and budgeting systems properly to ensure they are delivering value for money, senior MPs have warned. 

The Commons' Public Accounts Committee criticised ministries for not putting resource accounting at the heart of their management systems. The result is that departments are not exploiting the ability of the new accounting regime to identify areas of waste and low productivity.

Edward Leigh, the committee's Conservative chair, lamented Whitehall's poor performance. He said: 'Departments have highly developed mechanisms to help them use their resources more productively. Many departments are not yet using them properly. 

'If they did, they could identify areas of waste or low productivity. Just a small proportion of efficiency gain could save billions of pounds for the taxpayer.' 

Managing resources to deliver better public services, published on April 7, criticises ministries' slow progress towards ensuring that senior staff have the necessary skills and expertise to make resource accounting work. 

The report reveals that, despite the Treasury's requirement for departmental finance directors to be qualified accountants, in January 2004 just 39% met this standard. 

The committee uncovered a lack of understanding about the requirements of the new system. 

'While some departments have made good progress, many others still have a significant way to go to change the focus of control from cash to accruals, and to demonstrate the skills and capacity to use accruals-based information to better manage their finances and activities,' the report says.

PFapr2005

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