06 April 2001
The government's move to resource accounting and budgeting (Rab) became fully operational at the start of the financial year. Now the full cost of government departments' assets and liabilities, including depreciation, will be apparent, not just cash flow.
Central government's gradual adoption of private sector accounting practices has taken seven years.
The first published resource accounts for Whitehall departments were produced for 1999/2000. Sir John Bourn, head of the National Audit Office, criticised the late submission of some of these accounts and the poor quality of others in a report last week. Bourn blamed a lack of 'technically competent staff'.
A Treasury source said departments had made great advances in the training of staff in the intricacies of the new system.
'In the past five years we have seen a quantum leap in the production and use of resource accounting information. [Bourn's] statement is true for a number of departments but not across Whitehall as a whole. The departments that are behind will be under pressure from the Treasury to reach the appropriate level.'
Britain is believed to be only the third country to move to a fully operational resource accounting system.
Chief Secretary to the Treasury Andrew Smith said: 'From now on, the government will be using best practice in financial management. We'll have a far more sophisticated analysis of the cost of government activities and we will see improvements in management and decision-making right across government.'
PFapr2001
