69th Report - Whole of Government Accounts 2023-24

Select Committee

Public Accounts Committee HC 1243 4 March 2026

Report Status Response overdue

Conclusions & Recommendations 29 items (6 recs)

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Government Response (AI assessment · 6 of 29 classified)

Accepted 4

Acknowledged 1

Deferred 1

Recommendations

4 results

2 Accepted

The Whole of Government Accounts (WGA) has received a disclaimed audit opinion for two consecutive...

Recommendation

The Whole of Government Accounts (WGA) has received a disclaimed audit opinion for two consecutive years, with no clear indication that this position will improve in the near future. The Committee remains concerned that the Ministry of Housing, Communities and … Read more

Government Response Summary

MHCLG has written to the Committee alongside the Treasury Minute with the information requested in recommendation (a). The Treasury has expanded its analysis of the number of missing entities to cover a wider range of years and will continue to keep under review how further information might be incorporated into future WGA publications to enhance transparency.

HM Treasury

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3 Accepted

The timing and delivery of local government reforms remain unclear.

Recommendation

The timing and delivery of local government reforms remain unclear. The local government audit crisis stems from long-standing issues, including fragmented system ownership, limited audit and finance capacity, rising regulatory demands, overly complex accounts and financial reporting requirements, and the … Read more The timing and delivery of local government reforms remain unclear. The local government audit crisis stems from long-standing issues, including fragmented system ownership, limited audit and finance capacity, rising regulatory demands, overly complex accounts and financial reporting requirements, and the low profitability of local audit work. To address delays and improve transparency, statutory deadlines (“backstop dates”) were legislated for on 9 September 2024, requiring audited local authority accounts to be published by set dates. These deadlines aim to accelerate audit completion, reduce the backlog, and restore confidence in timely financial reporting. However, whilst the backstop is increasing the number of accounts brought to completion, it is also resulting in a higher number of disclaimed opinions, leaving an assurance gap over the data included within these accounts. Further reform followed on 18 December 2024 with the Local Audit Reform Strategy, which includes provisions in the English Devolution and Community Empowerment Bill to establish a Local Audit Office as a unified oversight body. While MHCLG aspires to eliminate qualified or disclaimed accounts by 2027–28, its reliance on vague ambitions without clear milestones makes progress difficult to assess. MHCLG officials have been over-optimistic before about how quickly audit timeliness could be improved. It will be important that the Treasury does not underestimate the impact of local government reorganisation on the Whole of Government Accounts. 4 recommendation a. MHCLG should provide, alongside the Treasury Minute response, a document which sets out: • the actions already taken to address the local audit crisis, including milestones achieved to date, • Key dates and deliverables that remain outstanding, with clear evidence of how these will be met, • Further measures the department intends to implement to ensure resolution, including how it will ensure that auditors build back assurance in a tim Show less

Government Response Summary

MHCLG has written separately to the Committee alongside the Treasury Minute with the information requested in recommendation (a). The government has a clear ambition to clear all backstop-related disclaimed opinions by the end of 2027-28 and has published a transition plan setting out the arrangements for the reformed local audit system to help meet this objective.

HM Treasury

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4 Accepted

The Treasury has improved long-term liability disclosures, but further work is needed to clearly convey...

Recommendation

The Treasury has improved long-term liability disclosures, but further work is needed to clearly convey their insights and relevance to readers. The WGA includes several large and complex liabilities, which the Committee has previously noted are difficult for readers to … Read more The Treasury has improved long-term liability disclosures, but further work is needed to clearly convey their insights and relevance to readers. The WGA includes several large and complex liabilities, which the Committee has previously noted are difficult for readers to understand and whose values change significantly due to changes in the discount rate. The three largest liabilities include: • Nuclear Decommissioning provision: Decreased by £19.1 billion from £126.0 billion in 2022–23 to £106.9 billion in 2023–24. • Clinical Negligence provision: As of 31 March 2024, the Department of Health and Social Care (DHSC) reported clinical negligence provisions totalling £58.2 billion, a decrease from £69.3 billion at 31 March 2023. • Pension liabilities: net pension liabilities have decreased from £2,639.1 billion in 2021–22 to £1,311.9 billion at 31 March 2024. Discount rates are used to calculate the present value of future cash flows, reflecting how much a future obligation is worth today, and are closely linked to interest rates, gilt yields, and inflation. Under International Financial Reporting Standards (IFRS), HM Treasury correctly applies a real discount rate (adjusted for inflation) to value long-term obligations. However, the Committee has previously urged HM Treasury to present both discounted and undiscounted values for all major liabilities to improve transparency and accessibility for readers. We strongly believe these 5 figures should be comparable year-on-year so that it is possible to see what action is being taken by the Government to reduce these liabilities. In 2023–24 HMT produced discounted and undiscounted values for the nuclear decommissioning provision balance only. There is therefore no reason why they should not produce it for all other long-term liabilities. recommendation a. In addition to the discounted values required under IFRS, Treasury should disclose undiscounted values for: i) Nuclear Decommissioning provision, ii) Clinical Negligence Show less

Government Response Summary

The Treasury will expand the section on undiscounted liabilities in the 2024-25 WGA by presenting provisions on a fully undiscounted basis, and will also provide an alternative presentation using a flat 2% discount rate applied on a net-of-CPI basis to illustrate the impact of discounting.

HM Treasury

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6 Accepted

The Whole of Government Accounts (WGA) is not sufficiently transparent on devolved spending.

Recommendation

The Whole of Government Accounts (WGA) is not sufficiently transparent on devolved spending. The WGA is designed to provide a comprehensive picture of the UK’s public sector finances and support more effective management of fiscal risks. By consolidating financial information … Read more

Government Response Summary

The Treasury will provide additional information on devolved expenditure in the performance report section of the 2024-25 accounts, giving clearer visibility of devolved spending across the nations of the UK. The Scottish Government has committed to strengthening its oversight and support arrangements to improve future performance.

HM Treasury

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