MPs voice fears for future of Whole of Government Accounts

Treasury urged to curb “optimism bias” as delays and incomplete data impact usefulness of public-spending snapshot
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By Jim Dunton

14 Oct 2022

HM Treasury has been told to be more realistic about the publication timescales and IT challenges facing its annual Whole of Government Accounts publication of public-sector-wide spending, after the latest roundup took more than two years to produce.

Members of parliament’s Public Accounts Committee acknowledged that the Coronavirus pandemic had impacted delivery of the most recent WGA publication – 2019-20’s accounts, which were not released until July this year.

But they said the Treasury had been suffering from “optimism bias” in its updates on when the spending snapshot would be available well after the first wave of the pandemic, and the emergency redeployment of staff it prompted, had passed. Problems with the department’s new OSCAR II database were said to have added around five months to delays.

The WGA initiative dates back to 2009-10 and is a world-first attempt to bring together all public spending for a single financial year into a single publication. The latest figures combine accounts for around 10,000 organisations including schools, the NHS and the Bank of England – as well as central government.

The figures show that the UK public sector spent £918.7bn on public services and collected revenue of £813.3bn in 2019-20.

PAC members have been pushing for more rapid production for years. In 2016 the committee complained about the 14 months that it took to compile the 2014-15 figures. The 2019-20 accounts were originally supposed to be published in June 2021. In the end they took 26 months to be published from the end of the financial year the relate to.

In 2018, James Bowler – appointed as new Treasury permanent secretary this week – told the committee the department was aiming to publish all WGAs within 12 months of the financial year they related to from the 2018-19 WGA onwards. The target has yet to be hit.

MPs said the “usefulness” to the public sector and other users of the 2019-20 WGA had been reduced because of the significant delays in its publication schedule. But they questioned whether HM Treasury’s plans to publish the 2020-21 WGA by March 2023 and the 2021-2022 WGA by November 2023 were realistic.

PAC members also expressed further concerns about the knock-on implications of failures in the local-government audit market. Their report said the latest WGA contained no data for 23 councils and unaudited data for a further 29 local authorities.

The report said the situation meant WGA data was “increasingly incomplete and unreliable”, despite the delayed publication.

“This has reduced the quality of data used to oversee the local government sector and to prepare the WGA and reduces the certainty of any consequent insights, conclusions or decisions,” it said.

The report added that the problem was “likely to escalate” in future WGA sets as fewer councils meet their audit deadlines.

PAC chair Dame Meg Hillier said the failures in local government audit had left councils operating in the dark and that the same picture was emerging in the WGA.

“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,” she said.

“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.”

Among its recommendations, the PAC called on HM Treasury to review the publication timescales for the 2020-21 and 2021-22 WGAs to ensure sure they are realistic, and urged it to carry out a lessons-learned review on the problems encountered with OSCAR II.

MPs also urged the department to introduce data-collection measures that would allow the WGA to reflect the ongoing cost of dealing with the Coronavirus pandemic after the National Audit Office’s Covid Cost Tracker is discontinued.

A Treasury spokesperson insisted regular reporting ensured the WGA was 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,” they said. “The government will respond to the committee’s recommendations in due course.”

They added that a new local audit unit had been set up at the Financial Reporting Council and that the Treasury was working with its new director to agree shadow arrangements ahead of the establishment of the Audit, Reporting, Governance Authority.

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