Treasury publishes 'most incomplete' Whole of Government Accounts yet

Quality of public sector spending snapshot is "being eroded", National Audit Office head warns
HM Treasury

By Jim Dunton

28 Mar 2024

The Treasury has published the latest installment of its groundbreaking public-spending snapshot, the Whole of Government Accounts, but the report is also the most incomplete in the dataset's 13-year history.

A total of 178 public sector bodies failed to provide accounts for the 2021-22 publication, up from 155 the previous year. The overwhelming majority of missing accounts relate to English local authorities.

Government departments, NHS bodies, schools, pension funds and state-owned companies are among the 10,000 bodies that contribute to the WAG, showing how public bodies spend the nation's money.

Although the missing accounts represent less than 2% of the total number of contributing bodies, National Audit Office head Gareth Davies said the "quality and completeness" of the dataset was "being eroded" by missing and unaudited data.

"While the WGA still contains useful information, the falling data quality reduces the reliability of trend data and the insight the accounts can provide," Davies said.

The WGA does not quantify the number of unaudited accounts that were used for its 2021-22 figures, but Davies said it was the highest in the WGA's history.

Ongoing capacity issues in the local-government audit market are the prime reason for the growing number of councils failing to submit accounts in time for the WAG. Davies said some 36% of English councils had not been able to submit accounts for the just-published collection.

Davies noted that the Treasury had delivered the 2021-22 WGA in just under two years following the end of the financial year it relates to – an improvement on the 27 months that it took to produce the 2020-21 dataset.

But he said the ongoing delays in the English local audit market could "jeopardise future progress" in terms of speeding up publication to pre-pandemic levels.

The latest WGA shows that in 2021-22, the UK public sector spent £1.04tn on public services and collected revenue of £881bn. Total spending in 2020-21 was £1.06tn.

Spending on social-security benefits accounted for £259.7bn in 2021-22, up £1.3bn on the previous year. The state pension made up 41% of benefits paid out.

Davies said previously submitted accounts indicated that the missing data from the 2021-22 WGA would include at least £52.1bn of net liabilities and £67.4bn of net public-sector pension liabilities.

The WGA contained a reference to the so-called "McCloud Remedy" to fix the 2015 public-sector pension reforms, which were found to be illegal in 2018. It suggested that the financial impact of the remedy is now estimated at £19bn.

NAO head Davies issued numerous qualifications on details in the WGA. Among them is one relating to the Department of Health and Social Care, where Davies said bosses had been unable to perform stock takes or provide a paper trail for £1.56bn in write downs and £8bn of inventory consumed during the year.

Elsewhere, Davies said he disagreed with the Treasury's decision to exclude the government's major stake in NatWest from the WGA. He noted that at the end of 2021-22, the government held 48% of the ordinary shares in the banking giant, which had gross assets of £782bn and gross liabilities of £740.2bn as of 31 December 2021.

In this month's Spring Budget, chancellor Jeremy Hunt reiterated the government's plans to dispose of its NatWest holdings by the end of the 2025-26 financial year.

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