"The publication of the first audited Whole of
Government Accounts is a landmark event, which has substantially
furthered the cause of transparency and accountability in public
spending.
"The accounts need to be significantly improved,
though, if they are to play a full part in comprehensive and
meaningful analysis of the government’s financial position. I am
particularly concerned that large organisations which in my view
are clearly owned and controlled by the government, have been
excluded.
"The Treasury is working on improvements and I
look forward to seeing these."
Amyas Morse, head of the National Audit
Office, 29 November 2011
The National Audit Office has welcomed the
publication by the Treasury of the very first audited set of
accounts showing in one document the financial position of the
whole public sector. The accounts, the Whole of Government Accounts
(WGA), are described as an important milestone for the Treasury in
its improvement of the transparency with which the Government
manages public finances and its accountability. However, the NAO
highlights some limitations in the information provided.
The WGA constitutes the first and most
comprehensive account of what the UK Government spends and earns
and what it owns and owes. It is broader than similar accounts
published by other countries, for it consolidates the financial
positions of central government, the devolved administrations,
local government, the health service and public corporations.
The WGA shows that, in 2009-10, the public
sector owned assets to the value of £1.2 trillion and liabilities
totaling £2.4 trillion, giving a net liability of £1.2 trillion.
The shortfall between operating revenues and expenses (including
finance costs) during the year was £165 billion.
The NAO does, however, highlight important
limitations in this first WGA. Among these are that the financial
position it presents is some 20 months old, a consequence of the
amount of preparation that has to be undertaken. Of particular
concern is that the WGA significantly understates the true value of
public assets and liabilities by excluding the publicly owned
banks, the Bank of England and Network Rail which, in the opinion
of the Comptroller and Auditor General, are owned and controlled by
government. It also gives limited analysis of spending across the
main functions of government, such as defence and education, or on
services such as consultancy, which would make the account more
useful to the reader.
The Comptroller and Auditor General has
qualified his audit opinion. Among the reasons for his
qualification are the exclusion of the government-controlled bodies
that, in the C&AG’s view, should have been included to comply
with the International Financial Reporting Standards.
Publication details:
HC: 1601, 2010-2012