HM Treasury’s flagship Whole of Government Accounts has failed to secure National Audit Office sign-off for a third year running because of missing or unaudited data from hundreds of local authorities.
The WGA represents a snapshot of the state of the UK public sector’s finances, and the 2024-25 dataset, published this morning, covers £1.29tn in total expenditure on public services made by more than 10,000 departments, agencies and other organisations.
However, the NAO has “disclaimed” the latest installment of the world-first spending dataset – which is now in its 16th year – because of the level of missing information that stems from the ongoing crisis in local government audit. As Civil Service World reported in December, HM Treasury was expecting the NAO’s decision.
The public spending watchdog acknowledged progress has been made to improve predominantly English councils’ financial reporting, such as the establishment of the new Local Audit Office. Nevertheless, it found that only 21 English local authorities (5% of the total) submitted audited data for the 2024-25 WGA. Some 280 English local authorities (69%) submitted unaudited data, while 107 (26%) submitted no data at all.
For the 2023-24 WGA, 16 English local authorities submitted audited accounts, 224 submitted unaudited accounts, and 167 submitted no accounts at all.
The NAO said the 2024-25 WGA includes unaudited data from 338 organisations in total – one of those bodies was the Welsh Government. A total of 145 bodies failed to submit data for 2024-25, down from 201 the previous year. The Treasury said there are 55 public bodies that have failed to provide any data to the WGA in any year since 2020-21.
The Treasury estimates that the impact of missing data on the 2024-25 WGA is that net liabilities are overstated by £59.2bn and net expenditure is understated by £14.8bn.
The NAO said that when organisations fail to submit data, the Treasury uses its previous submission to calculate the value of the omission, meaning that projections become “progressively less precise” for bodies with routinely missing data.
NAO head Gareth Davies said that despite the decision not to sign off the 2024-25 WGA, he believes the document is a “useful tool” for the management of public finances.
He also welcomed the government’s recent measures to begin to restore normal audit assurance for English local authorities.
“This work must be progressed with vigour to ensure timely and high-quality financial reporting for every local body, supporting their accountability to local people and providing more reliable whole of government accounts,” Davies said.
Public Accounts Committee chair Sir Geoffrey Clifton-Brown said the 2024-25 WGA has been published in a “more timely” way than last year’s dataset, and contains “promising signs of improvement”.
But he added that the government’s programme to make significant improvements is "a long way off delivering".
“In the meantime, the Treasury must support more local authorities to submit high-quality data on time," Clifton-Brown said.
Conrad Smewing, who is director general for public spending at HM Treasury and accounting officer for the WGA, acknowledged that “significant challenges” continue to affect the completeness and reliability of the document.
In his foreword to the latest WGA, he said the disclaimed audit opinion from the NAO reflected “systemic issues” within the local audit market and delays in audited accounts.
“Although there has been a sharp reduction in missing data in 2024-25, the level of unaudited submissions continues to grow, particularly within English local government,” he said. “This growth was within expectations as actions taken by HMT and MHCLG gained traction. The use of such data reflects the priority to maximise transparency while wider audit system reforms are implemented.
“Addressing these systemic issues is critical to restoring full audit assurance to WGA. The government’s local audit reform programme, including the introduction of statutory backstop dates, is intended to support recovery.”