Press Release - HM Treasury Resource
Accounts 2008-09: Report by the Comptroller and Auditor General to
the House of Commons
20 July 2009
The Comptroller and Auditor General, the head
of the National Audit Office, today reported to Parliament that he
has qualified his audit opinion on HM Treasury’s Resource Accounts
for 2008-09. This was because, in that year, HM Treasury
incurred expenditure of some £24 billion more than Parliament had
authorized.
This arose because of the need to provide for
expected net losses arising from the operation of the Asset
Protection Scheme – under which HM Treasury provides banks with
protection against future credit losses on certain assets in
exchange for a fee. HM Treasury knew from the outset that the
Scheme would result in a significant loss but at that stage there
was not enough certainty about which banks would participate and on
what terms to include a provision in the Spring Estimates.
Subsequently the participation of the Royal
Bank of Scotland Group and the Lloyds Banking Group was announced
and they are currently in negotiations with HM Treasury.
HM Treasury’s Balance Sheet also shows the
level of assets and liabilities recorded have increased
significantly compared to last year. Total assets less total
liabilities now stand at £44 billion, up from £2 billion in
2007-08.
Amyas Morse, the head of the National Audit Office, said
today:
“This financial year has been an
extraordinary one and has presented extraordinary challenges for HM
Treasury. The department’s huge in-year growth in its assets
and liabilities illustrates the extreme nature of the problems
faced and action taken. It should be recognized that the
pressure for the department to intervene by offering the Asset
Protection Scheme gave it no time to seek from Parliament the
additional resources needed. The breach of the Treasury’s
expenditure limits has necessitated my qualifying my opinion on its
resource accounts. This arose from the need to take action at
a point when it was too late to obtain spending authority through
the Parliamentary estimates
process.”
Notes for Editors:
- Parliament had authorized a limit of £21
billion to be spent on “raising the rate of sustainable growth
and achieving rising prosperity and a better quality of life, with
economic and employment opportunities for all”. However,
in pursuing this, HM Treasury incurred expenditure totalling some
£45 billion.
-
The amount provided in the accounts reflects
the current base-case estimate of the net potential losses of the
scheme, but the factors on which the Treasury rely for the
assessment will evolve over the life of the scheme.
-
Press notices and reports are available from
the date of publication on the NAO website, which is at http://www.nao.org.uk/.
Hard copies can be obtained from The Stationery Office on 0845 702
3474.
-
The Comptroller and Auditor General, Amyas
Morse, is the head of the National Audit Office which employs some
900 staff. He and the NAO are totally independent of
Government. He certifies the accounts of all Government
departments and a wide range of other public sector bodies; and he
has statutory authority to report to Parliament on the economy,
efficiency and effectiveness with which departments and other
bodies have used their resources.
Press Notice 44/09
All enquiries to Barry Lester, NAO Press
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7937
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692