The credibility of the Treasury’s Whole of Government Accounts continues to be ‘undermined’ by a number of errors and omissions that should be rectified, the Public Accounts Committee said today.
In a report examining the 2011/12 edition, MPs said there had been positive developments in the quality of the accounts compared to the two previous iterations in 2009/10 and 2010/11.
However, they stated there remained ‘room for improvement’ in a number of areas.
Among the PAC’s concerns was the continued exclusion of a number of public sector bodies, including Network Rail and the government-owned banks, from the WGA.
‘We welcome the fact that the ONS is reviewing its treatment of Network Rail in the National Accounts and that it will report the outcome before next year’s WGA,’ the report stated.
‘But we remain firmly of the view that the Treasury should follow normal accounting rules, rather than the National Accounts’ classifications, when compiling the WGA.’
The MPs also warned that some poor quality data limited the usefulness of the WGA, noting that the National Audit Office had qualified them on grounds of completeness, timeliness and accuracy of the data supplied for schools and academies.
PAC chair Margaret Hodge warned that the issue could become a greater problem. ‘The accounts have again been qualified over the completeness, timeliness and accuracy of the information supplied for schools and academies. This issue is likely to become more significant as the number of academies rises rapidly,’ she said
Hodge also warned that different definitions used within WGA could also limit understanding.
‘Users find it hard to understand, for example, why the government debt and deficit highlighted in the WGA differ from those reported in the Office for National Statistics' National Accounts,’ she said.
‘According to the former document, compiled on the basis of well-understood accounting standards, the UK’s in-year deficit for 2011/12 was £185bn. The National Accounts used by the Chancellor put the figure at £90bn.’
However, Hodge added the WGA ‘was the most comprehensive picture we have of all the assets and liabilities in the public sector’ and provided vital data on cross-cutting public sector issues on which government needed to act.
She welcomed ministers’ focus on some of the key issues identified, such as the £19.4bn liability for clinical negligence claims, but added it was ‘frustrating’ to see other issues ignored.
‘For instance, taxpayer losses due to fraud and error are worryingly high,’ she said.
‘It is staggering that, in one year, the public sector was defrauded of over £20bn and the tax gap rose to £35bn. And the financial liabilities for dealing with nuclear waste keep growing with timetables continually slipping.’
The Treasury published the WGA for 2011/12 in July this year. In total, the NAO qualified the WGA on six grounds.
