The Treasury has today published an unaudited summary of the Whole of Government Accounts (WGA) for the year 2009-10. The government made available the key balance sheet analysis contained in this summary to the Office for Budget Responsibility (OBR) to enhance their analysis of the sustainability of the public finances in their first ever Fiscal Sustainability Report, also published today.
This is the first ever set of publication of information for the whole of the public sector, covering over 1,500 public bodies. It has been 10 years in the making, having been delayed by five years. The full, audited accounts will be published in the autumn and will be the most ambitious in scope produced in any country.
The publication of this summary represents a leap in the transparency of reporting the government’s future liabilities. It represents a snapshot of the government’s financial position on a commercial accounts basis. Its aim is to enable Parliament and the public better to understand and scrutinise how taxpayers’ money is spent.
While the new information it presents does not affect the fiscal position, the analysis it includes on, for example, Private Finance Initiative (PFI )and public service pension liabilities makes clear the scale of the fiscal challenge the government faced before the June 2010 Budget.
The Accounts show that the public service pension liabilities as of 09/10 were £1.1 trillion pounds.
They also show that PFI capital liabilities as of 09/10 were over £35 billion. The OBR’s assessment in their Fiscal Sustainability Report is that these liabilities relate to about 90 per cent of all operational PFI assets, which suggest the total capital liability was closer to £40billion. The difference arises due to the internationally recognised accountancy standards used in WGA.
Welcoming the publication of the OBR’s report and commenting on the publication of the WGA, the Chancellor of the Exchequer, George Osborne, said:
The information published today by the Treasury and the OBR represents a step change in transparency, lifting the lid on the liabilities built up in the past and the pressures we face in the future. They show that our deficit and reform plans are not just right for the economy now, but also right for the economy and fair for the country in the future.
Notes for Editors
The unaudited summary of the Whole of Government Accounts for 2009-10 is available on the WGA section of the Treasury website.
The full, audited accounts will be published later this year.
The government announced the creation of an independent Office for Budget Responsibility in 2010 to provide independent and authoritative analysis of the UK’s public finances.
As part of this role, the Budget Responsibility and National Audit Act 2011 requires the OBR to produce “an analysis of the sustainability of the public finances” once a year. The OBR’s first Fiscal Sustainability Report has been published today and is available on the OBR’s website (external website, opens ina new window).
Background to the WGA
Parliament originally requested consolidated accounts for central government as long ago as the 1994-95 parliamentary session. In July 1997, the Treasury agreed to look at the feasibility of such accounts.
The resulting 1998 scoping study concluded that producing consolidated accounts for the whole public sector was the best way to proceed and that this would bring benefits for both government and external users.
The commitment to produce WGA was initially made in the Code for Fiscal Stability , following this report. This commitment became a statutory requirement through the Government Resources and Accounts Act 2000 (GRAA), which created the requirement for Treasury to annually prepare WGA.
Whilst the GRAA created an obligation for Treasury to prepare WGA, it left the timetable for publication to be set at a later date.
The initial aim was to produce an audited account covering the central government sector for the 2005-06 year. This was delayed until 2007-08 when the scope of the account was extended to include local government, NHS and public corporations.
Publication was then further delayed when it was agreed that central government departments would move to IFRS. In the 2008 Budget, the then Chancellor announced that WGA would be published for 2009-10, in line with the move to IFRS in the central government sector.
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