Report of the Comptroller and Auditor General: Whole of Government Accounts 2012-13
11 Jun 2014 12:00 PM
Full report: Report of the
Comptroller and Auditor General: Whole of Government Accounts
2012-13
The Treasury is continuing to
make improvements to the Whole of Government Accounts (WGA), which shows in a
single document the overall financial position of the UK public sector. The
document is also being produced more quickly. Since the Treasury first
published the 2009-10 WGA, it has brought forward publication of the WGA by
five months. The 2012-13 WGA was published some 15 months after the financial
year to which it relates compared to 20 months for the 2009-10 WGA. The
Treasury aims to deliver the 2014-15 WGA within nine months of the year
end.
According to yesterday’s
report from the National Audit Office, all these improvements enhance the
timelines and robustness of the WGA allowing it to be a key part of the
Treasury’s framework for managing the government’s
finances.
However, the Comptroller &
Auditor General, Amyas Morse, has again qualified the WGA because of
significant continuing issues with the quality and consistency of the data
included; and has again expressed concern that bodies such as Network Rail and
FE institutions continue to be excluded, even though accounting standards
require their inclusion.
The NAO points out that Mr
Morse’s audit opinion on the 2012-13 WGA is similar to that for 2011-12
and previous years. However, if the Treasury is successful in its plans to
address the issues that have led him to qualify his opinion, then he might be
able to remove a number of qualifications in the next four
years.
The Comptroller and Auditor
General continues to regard the WGA as a key means through which Parliament and
other stakeholders might gain greater insight into the wide range of activities
that government undertakes, scrutinize public finances and hold government to
account. He believes, however, that government could do more to exploit the
WGA’s potential as a reporting mechanism.
The latest set of accounts, the
fourth such to be published by the Treasury, shows that net expenditure for the
year 2012-13 (the in-year shortfall between income and expenditure) decreased
from £185 billion to £179 billion, largely owing to falls in the
Government’s cost of borrowing and increases in revenue.
Direct expenditure (expenditure
incurred in the direct delivery of the government’s policies) increased
by £18 billion in 2011-12 to £666 billion. This increase was due to
increases in the purchases of goods and services and in provision
expense.
The Government’s overall
net liability (the difference between what it owes and what it owns) increased
in 2012-13 by £283 billion to £1,630 billion (compared with
£1,347 billion in 2011-12). This was largely down to a £169 billion
increase in public sector pension liabilities and a £31 billion increase
to government borrowing in the form of issuing gilts to finance government
spending.
As the Treasury now has more WGA
trend data, it is starting to highlight some of the longer-term risks on the
balance sheet, and beginning to use this information to help inform
government’s spending plans. For example, WGA data has drawn attention to
movements in nuclear decommissioning and clinical negligence
provisions.
“I welcome the Treasury’s continuing commitment
to improving WGA in terms of its timeliness and content. The Treasury is taking
steps to make the disclosures in WGA more detailed and transparent, giving the
reader more information about how government spends taxpayers’ money. The
trends emerging in WGA data are also enabling the Treasury to start to
highlight some longer term risks on the balance sheet. Such improvements will
enable the Treasury to manage public finances better. However, more could be
done to exploit the WGA’s potential as a reporting mechanism. The
Treasury should continue its work to strengthen the WGA so that I will be able
to remove my qualifications. The Treasury should also raise the profile of WGA
within government and make the information it provides integral to the routine
monitoring of risks to public finances.”
Amyas Morse, head of the
National Audit Office, 10 June 2014
Notes for
Editors
- Press notices and reports are
available from the date of publication on the NAO website, which is atwww.nao.org.uk. Hard copies can be obtained by using the relevant
links on our website.
- The National Audit Office
scrutinises public spending for Parliament and is independent of government.
The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of
the House of Commons and leads the NAO, which employs some 820 staff. The
C&AG certifies the accounts of all government departments and many other
public sector bodies. He has statutory authority to examine and report to
Parliament on whether departments and the bodies they fund have used their
resources efficiently, effectively, and with economy. Our studies evaluate the
value for money of public spending, nationally and locally. Our recommendations
and reports on good practice help government improve public services, and our
work led to audited savings of almost £1.1 billion in
2013