Our overview of the HM Treasury examines its spending and performance. It brings together insights from our reports and other publicly available sources including the Treasury’s annual report and accounts.

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Key Takeaways

Financial management and reporting

HM Treasury published its Annual Report and Accounts 2025-26 before Parliament’s summer recess, and the C&AG’s audit opinion was unqualified.

Among matters noted by the C&AG as significant in his audit was the increase in amortised cost loans issued by the National Wealth Fund (a Treasury-owned company) from £1.5 billion to a total of £6.8 billion, most of which related to Sizewell C.

Internal audit gave a ‘moderate’ opinion on HM Treasury for 2025-26 for the fifth year. HM Treasury says it has worked more closely with Internal Audit this year to ensure that higher risk areas are included in the audit programme. In response to findings from both internal audit and the C&AG, HM Treasury is strengthening oversight of its arm’s length bodies, with particular focus on risk reporting and escalation.

The Government Finance Function reports to HM Treasury and aims to drive a step-change in financial management across government. However, poor cost data and slow adoption of common standards are barriers.

HM Treasury is reducing its day-to-day controls over departments’ spending, in favour of a stronger role for Accounting Officers as managers of government departments’ budgets and greater transparency between departments and HM Treasury. This is known as Project RESET.

Productivity

Under HM Treasury’s new continuous approach to improving efficiency, it and other departments will report publicly on their progress in 2027. HM Treasury has committed to deliver efficiencies of at least 3% (£13 million) by 2028-29.

Risk and resilience

As both economics and finance ministry, HM Treasury faces complex and dynamic risks affecting all its strategic outcomes. It must balance short-term operational demands with long-term preparedness.

In October 2026 UK Government Investments published the second annual Financial Investment Report setting out the government’s financial investment portfolio, its value, risks and returns. This is part of the new Financial Transaction Control Framework and a key control to help manage risk as the government ramps up investments to support growth.

HM Treasury is accountable for the cross-government Risk Centre of Excellence which provides guidance and supports departments to improve their risk management. In 2025-26, HM Treasury introduced an improvement plan to further strengthen its own internal framework of governance, risk management and control.

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