Whole of Government Accounts 2018-19

Public Accounts Committee Closed Inquiry
Opened: 4 Nov 2020 Closed: 25 Mar 2021 Parliament page
The Whole of Government Accounts (WGA) is a unique document which provides the most complete and accurate picture available of UK public sector finances. The WGA is a set of financial statements prepared by HM Treasury in accordance with International Financial Reporting Standards, that consolidates information on the financial performance … Read more
8 Recommendations
16 Conclusions
1 Report
1 Oral session
4 Letters
1 Event
Activity timeline 7 events
2 Nov
2021
Correspondence
14 Sep
2021
Correspondence
10 Sep
2021
Correspondence
20 Jul
2021
Correspondence
26 Mar
2021
Report published
22 Jan
2021
Report published
19 Nov
2020
Oral evidence
Oral evidence sessions 1 session
19 Nov 2020
View on parliament.uk
Whole of Government Accounts 2018-19
Cat Little · Cabinet Office Sir Tom Scholar · HM Treasury Vicky Rock · HM Treasury
Title HC No. Published Items Response
Thirty-Seventh Report - Whole of Government Accounts 2018–19 HC 655 22 Jan 2021 24 Responded
Recommendations & Conclusions
19 results
Clear
2 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
There is an apparent lack of ownership by the Treasury of the analysis and scenario...
There is an apparent lack of ownership by the Treasury of the analysis and scenario planning activities necessary to manage the impact of COVID-19 on government finances. The scale of the likely increase in government borrowing to fund government’s response … Read more
Government Response
The government agrees with the recommendation and states it has already implemented it. They detail the extensive economic analysis undertaken by HM Treasury since the pandemic's onset, including advice to ministers, synthesis of various economic data and forecasts, and assessments presented in the March 2021 Budget document, and commit to continuing this analysis.
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3 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
The WGA does not provide assurance that significant risks to the UK’s financial sustainability are...
The WGA does not provide assurance that significant risks to the UK’s financial sustainability are well managed. A key consideration for any organisation is its financial sustainability. There are several government liabilities disclosed in the WGA that, due to their … Read more
Government Response
The government agrees with the recommendation and commits to providing more meaningful insight into the management of financial sustainability risks. Future WGAs, starting with the 2019-20 report, will include additional information on how key liabilities are managed, their evolution, and how value for money is achieved, drawing on the Balance Sheet Review and OBR projections.
HM Treasury
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4 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
The financial sustainability of some local authorities presents a significant risk to government.
The financial sustainability of some local authorities presents a significant risk to government. While local authorities have autonomy over their spending, the Treasury is the ‘funder of last resort’ should a local authority become insolvent. As COVID-19 has increased the … Read more
Government Response
The government agrees with the recommendation, committing to include additional and more detailed information on local government fiscal risks and financial breakdowns in current and future WGA performance reports by Autumn 2021. HM Treasury will also support MHCLG in implementing the Redmond Review response.
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5 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
The Treasury has aspirations to standardise financial reporting across government but has not set out...
The Treasury has aspirations to standardise financial reporting across government but has not set out how this will make the WGA more useful or accessible. The Treasury faces difficulties when trying to categorise transactions and balances reported by over 9,000 … Read more
Government Response
The government agrees with the recommendation, stating that the Government Finance Function is developing a performance framework and will begin reporting on its progress in April 2021. It further commits to including estimated expenditures on EU Exit and COVID-19 in the WGA 2019-20 performance report by Autumn 2021, and has set additional reporting requirements for departmental Annual Reports and Accounts.
HM Treasury
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7 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
The WGA 2018–19 disclosures relating to COVID-19 relied heavily on a summary of a report...
The WGA 2018–19 disclosures relating to COVID-19 relied heavily on a summary of a report produced by the National Audit Office.10 The Treasury did not attempt to explain to Parliament or the user of the accounts how it was managing … Read more
Government Response
The government agreed to include additional forward-looking information and commentary on financial position and fiscal risks, including principal risks, future cash flows, and COVID-19 expenditure, in the WGA 2019-20 performance report by Autumn 2021.
HM Treasury
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8 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
The WGA discloses a number of significant liabilities that due to their size and nature...
The WGA discloses a number of significant liabilities that due to their size and nature pose unique risks to the UK’s financial sustainability and government’s ability to achieve value for money. At 31 March 2019, the UK’s liability in relation … Read more
Government Response
The government agreed to provide more information in the WGA 2019-20 and future WGAs on how key liabilities are managed, their evolution, and how value for money is achieved, drawing on OBR projections and reflecting actions from the Balance Sheet Review.
HM Treasury
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10 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
Regarding the provision for clinical negligence, the WGA shows a levelling off of new cases...
Regarding the provision for clinical negligence, the WGA shows a levelling off of new cases and explains that in the second year of its new strategy to tackle clinical negligence laid out in April 2017, NHS Resolution mediated 380 cases, … Read more
Government Response
The government highlights that the Balance Sheet Review, which concluded in November 2020, aimed to strengthen control of long-term risks, and states that further actions for risk management are now in place. Future WGAs, starting with WGA 2019-20, will provide more information on how key liabilities, including clinical negligence, are managed and how value for money is achieved.
HM Treasury
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11 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
The scale of the likely increase in government borrowing to fund government’s response to COVID-19...
The scale of the likely increase in government borrowing to fund government’s response to COVID-19 is a significant new challenge to the Treasury’s objective to place the public finances on a sustainable footing.22 In its report on Evaluating the government … Read more
Government Response
The government agreed with the committee's concerns and committed to providing additional forward-looking information and commentary on the Treasury's approach to managing fiscal risk, including details on future cash flows and COVID-19 expenditure, in the WGA 2019-20 performance report.
HM Treasury
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12 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
We were therefore interested in what analysis the Treasury had now been conducting in order...
We were therefore interested in what analysis the Treasury had now been conducting in order to give assurance that it had a handle on the fiscal risks the pandemic poses to the UK economy and fiscal sustainability. We asked what … Read more
Government Response
The government agrees with the Committee, reiterating the OBR's role as the official economic forecaster. However, it commits that the WGA 2019-20 performance report will provide additional forward-looking information on the Treasury’s approach to managing financial position and fiscal risks, including principal risks, future cash flows from liabilities, and COVID-19 expenditure.
HM Treasury
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13 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
With the UK’s debt as a proportion of GDP above 100%, any increases in interest...
With the UK’s debt as a proportion of GDP above 100%, any increases in interest rates would have a significant impact on the economy and government spending. When asked whether it was modelling for interest rate increases, the Treasury confirmed … Read more
Government Response
The government agreed with the committee's observation, committing to enhanced transparency on fiscal risks. The WGA 2019-20 performance report will include additional forward-looking information and commentary on the Treasury's approach to managing fiscal risk, including implications for future years and details on COVID-19 expenditure.
HM Treasury
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14 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
Although at some points during our evidence session the Treasury stated that it was conducting...
Although at some points during our evidence session the Treasury stated that it was conducting forecasting and scenario planning, it was not clear what this entailed, how this differed from work by third parties such as the OBR, and whether … Read more
Government Response
The government agreed with the recommendation and confirmed it has implemented it by setting out the specific economic analysis it undertakes, including leveraging various data sources, considering NPI impacts, publishing analyses, and incorporating this information into policy advice for ministers.
HM Treasury
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15 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
If debt payments increase, or tax receipts decrease, there will be a decrease in budget...
If debt payments increase, or tax receipts decrease, there will be a decrease in budget available for other public spending.29 We asked the Treasury whether it had identified what current projects may need to be cancelled, or what potential investments … Read more
Government Response
The government agreed with the committee's observation, committing to enhanced transparency on fiscal risks. The WGA 2019-20 performance report will include additional forward-looking information and commentary on the Treasury's approach to managing fiscal risk, including implications for future years and details on COVID-19 expenditure.
HM Treasury
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16 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
As the UK Government has a devolved structure, local authorities have significant autonomy over their...
As the UK Government has a devolved structure, local authorities have significant autonomy over their spending and have powers to invest in commercial property. We have, over a number of years, raised concerns over the behaviour of local authorities with … Read more
Government Response
The government agreed with the committee's observation, stating it is working with MHCLG to support the local audit market and manage fiscal risks. MHCLG has already published a response detailing specific actions, including enabling fee agreements, extending audit deadlines, and providing an additional £15 million to local authorities in 2021-22.
HM Treasury
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17 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
In September 2020, Sir Tony Redmond published his report Independent Review into the Oversight of...
In September 2020, Sir Tony Redmond published his report Independent Review into the Oversight of Local Audit and the Transparency of Local Authority Financial Reporting (Redmond Review), noting that the local audit market is very fragile.33 He concluded that current … Read more
Government Response
The government agreed with the Committee’s point and has already taken concrete actions, including MHCLG publishing a response to the Redmond Review, allocating an additional £15 million to local authorities, and taking steps to support the audit market, such as enabling fee agreements and extending audit deadlines.
HM Treasury
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19 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
We have previously recommended that financial reporting within the WGA should be improved by providing...
We have previously recommended that financial reporting within the WGA should be improved by providing more detailed disclosures to ensure that users of the account have the comprehensive information needed to understand the public finances.39 WGA is increasingly important to … Read more
Government Response
The government commits to including estimated expenditures on EU Exit and COVID-19 in the WGA 2019-20 performance report by Autumn 2021, addressing the Committee's observation about the need for more granular financial reporting. They also highlight ongoing work by the Government Finance Function to improve data consistency.
HM Treasury
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20 Recommendation Accepted
Thirty-Seventh Report - Whole of G…
For the WGA to record the impact of COVID-19, government bodies will need to record...
For the WGA to record the impact of COVID-19, government bodies will need to record costs in a manner that allows the increase in spending due to COVID-19 to be identifiable from any other changes in spending.42 The Treasury outlined … Read more
Government Response
The government agreed with the recommendation, stating it is developing a performance framework to improve data comparability and embedding minimum standards for departmental reporting. HM Treasury has set additional reporting requirements for EU Exit and COVID-19 in departmental Annual Reports and Accounts, and the WGA 2019-20 performance report will include estimated expenditures for these.
HM Treasury
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21 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
Previously the Treasury has expressed dissatisfaction at the level of expenditure across all types of...
Previously the Treasury has expressed dissatisfaction at the level of expenditure across all types of government spending that is classified as miscellaneous or other by WGA bodies, as it prevents the WGA providing more granular information. The Treasury stated that … Read more
Government Response
The government agrees with the importance of improving financial reporting and confirms that the Government Finance Function is developing a performance framework and converging finance processes and data standards. It notes that OSCAR 2 implementation and these convergences will enhance data comparability, aligning with the Treasury's existing plans highlighted in the Committee's conclusion.
HM Treasury
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23 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
The NAO highlighted in the C&AG Report for the WGA for the year ended 31...
The NAO highlighted in the C&AG Report for the WGA for the year ended 31 March 2019that the failure to complete local government audits in a timely fashion led to both an increasing number of bodies whose financial information is … Read more
Government Response
The government committed to including more information on local government fiscal risks in the WGA 2019-20 performance report and working with MHCLG to support the Redmond Review's implementation to ensure stability in local audit.
HM Treasury
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24 Conclusion Accepted
Thirty-Seventh Report - Whole of G…
We expect the COVID-19 pandemic to exacerbate these challenges to the timely production of the...
We expect the COVID-19 pandemic to exacerbate these challenges to the timely production of the WGA in future. The Treasury accepted that it can only start to produce the account once it receives a critical mass of audited returns from … Read more
Government Response
The government committed to including more information on local government fiscal risks in the WGA 2019-20 performance report and working with MHCLG to support the Redmond Review's implementation to ensure stability in local audit.
HM Treasury
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Government Response AI assessment · 22 of 8 classified
Accepted 19
Accepted in Part 1
Not Addressed 2
Total 8 recs + 16 conclusions
Correspondence 4 letters
2 Nov 2021 Correspondence Catherine Little, Director General, Public Spending Head of Government Finance Function, re Whole of Government Accounts (WGA) 2019-20, dated 23 October 2021
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14 Sep 2021 Correspondence Catherine Little, Director General, Public Spending Head of Government Finance Function, re Whole of Government Accounts (WGA) 2019-20, dated 9 September 2021
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10 Sep 2021 Correspondence from Dame Meg Hillier, Chair, Committee of Public Account, re Whole of Government Accounts, dated 31 August
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20 Jul 2021 Correspondence Catherine Little, Director General, Public Spending Head of Government Finance Function, re Whole of Government Accounts (WGA) 2019-20, dated 13 July 2021
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