Managing the public sector balance sheet
Guidance, requirements and reporting on the public sector balance sheet.
This collection brings together guidance, requirements and reporting on management of the public sector balance sheet. It includes an overarching framework for public sector organisations on balance sheet management and further guidance on specific types of assets and liabilities or different types of transactions.
Balance sheet framework
The Balance Sheet Framework covers government’s overarching approach to managing everything it owns (assets) and what it owes (liabilities). It sets out policy and guidance for public sector organisations on asset management, including on physical assets, financial investments, state-owned enterprises and knowledge assets, as well as on liability management, including on public sector pensions, private finance, and contingent and implicit liabilities.
Contingent liabilities
Contingent liabilities are commitments to use public funds if uncertain future events occur. These documents set out the Treasury approval process for contingent liabilities, guidance on how to design new contingent liabilities, and reporting on government’s stock of contingent liabilities.
Annual Report on the UK Government’s Contingent Liabilities
Implicit liabilities
Implicit liabilities are like contingent liabilities in being uncertain potential costs that could arise, but they are not liabilities in a legal or financial reporting sense. This guidance sets out how departments should identify, quantify and proactively mitigate government’s fiscal exposure to implicit liabilities.
Financial assets and investments
Financial transactions are where the public sector acquires or sells financial assets. Managing financial assets and investments bring related risks, such as exposure to exchange rate movements. These documents set out the Treasury approval process and guidance for policy design on financial transactions and management of foreign exchange risk, together with annual reporting on the stock of government’s financial investments.
Asset disposals
Asset disposals involve the sale, trade or disposal of assets by public sector organisations. Central guidance on asset disposals is contained within the Balance Sheet Framework, but these documents set out more detailed requirements on when and how asset sales should be disclosed to Parliament, and how to dispose of surplus property assets.
Knowledge assets
Knowledge assets are intangible or non-physical assets that encompass data, inventions, proprietary information and know-how. These documents provide guidance on how organisations should identify knowledge assets, consider their protection, and facilitate commercialisation and other means of value exchange.
Balance sheet reporting
The government produces regular reporting on the public sector balance sheet, to provide transparency to the public and to parliament. This includes monthly Public Sector Finances statistical releases produced by the Office for National Statistics and an annual consolidation of over 10,000 public sector organisations’ accounts in the Whole of Government Accounts.