Government accounts less reliable due to long delays, MPs warn

Delays reduce the value and transparency of accounts meant to provide a view of how taxpayers’ money is managed, a Commons Committee said.

13 October 2022

Long delays in publishing Government accounts have reduced their value and transparency, MPs have said.

The influential Commons Public Accounts Committee (PAC) criticised the Treasury for releasing the 2019-20 Whole of Government Accounts (WGA) 26 months after the year-end and five months after the statutory deadline.

The WGA should provide “a uniquely comprehensive view of how government manages taxpayer’s money and of the position of public finances,” the PAC said in a new report.

But the committee said the delay, caused partly by the impacts of Covid-19 on finance departments and worsened by the Treasury’s “poor” implementation of a new IT system, undermined its usefulness.

“Delays reduce the value and transparency of information in the WGA to the public and to decision makers in government, and reduces the certainty of any consequent insights, conclusions, or decisions,” the PAC said.

The WGA is also “increasingly unreliable and incomplete” because of failures in the local audit market, which were exacerbated by the pandemic.

Only 45% of 2019-20 local audits in England and Wales were completed by the deadline due to the problems, which the PAC warned are escalating, with the proportion of 2020–21 audits completed on time plummeting to 9%.

Coronavirus – Tue Dec 8, 2020
PAC chair Dame Meg Hillier said failures in local government audit have left councils in the dark and the same picture is emerging in the cross-government national accounts (UK Parliament/Jessica Taylor)

The PAC said the Treasury “must improve its project management to meet future timetables” and called for enhanced reporting on climate change, the long-term costs of the Covid response, and the impact of inflation on budgets, spending and pay reviews.

PAC chair Dame Meg Hillier said: “Failures in local government audit have left councils operating in the dark, without the management information needed to make key spending decisions in the round and balance their books.

“Now we see the same picture emerging in the cross-government national accounts.

“We still desperately need to see the big picture as the Government balances one massive intervention after another – from the pandemic response to the interrelated energy, climate, and cost-of-living crises we face now and into the future.

“The public also deserves a clear and transparent record of the full costs and liabilities that generations of current and future taxpayers have been committed to.”

The PAC also criticised the Government for failing to set out the consequences of planned Civil Service staffing cuts.

The Government announced its intention to slash 91,000 jobs over the next three years but does not yet understand the scale or cost of redundancies or the effect on public services, the committee warned.

“This scale of headcount reduction has the potential to bring about significant consequences for departmental service quality and delivery,” the PAC said.

Labour accused the Government of “reckless abandon” over the delays in publishing the transparency data.

The party’s deputy leader, Angela Rayner, said: “At every twist and turn, the Conservatives attempt to cover up the shocking state they’ve left our public finances in. Ministers have broken their own rules, held local services back, and failed to deliver. Their mismanagement of public finances, shoddy accounting practices and this flagrant lack of openness show they just can’t be trusted.

“Labour will turn the page on years of Tory reckless abandon, creating an Office of Value for Money so taxpayers’ money is treated with the respect it deserves and the British public gets real transparency.”

A Treasury spokesperson said: “Our regular reporting ensures our accounts are reliable. We are working with stakeholders across the public sector, including the Department for Levelling Up, Housing and Communities to improve the timeliness of accounts.

“The Government will respond to the committee’s recommendations in due course.”

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