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Government accounting: Public Accounts Committee blasts Treasury

posted 27 Apr 2013, 11:55 by Peter Webb   [ updated 29 Apr 2013, 06:11 ]

There is in government circles a complacent out-of-date approach to running the country.  Gone are the days of war fighting and empire administration when we as a nation succeeded almost to the manor born. Growing domestic intervention in the good times has not been so well managed. Central to that is questionable ministerial to mandarin effectiveness with a lack of financial control as conventionally understood. The size of the public debt is one  major result.

On 10th November 2008 Matthew Elliott for the TaxPayers Alliance joined 8 of his European counterparts in signing a published letter protesting at inaccurate and audit-failed EU Accounts over 14 years (now 18). On the day following, MEP Ashley Mote’s answering letter explained that satisfactory assurance would never occur because of “the concept of “shared management” which leaves accountability in the hands of recipients of public funds”. This immediately suggested  that the UK hadn’t even started on its 14 year audit failure, because, put another way,  ‘governments vote funds and then walk away’. Correspondence with the Comptroller and Auditor General (NAO) confirmed this and general fears about lack of national government financial disciplines. While in reply good intentions and improvements were stated there unexpectedly came the news that it was intended for the first time to produce Whole of Government Accounts(WGAs), followed by WGBs (budgets). 

Called for by Parliament in 1995 the WGAs arrived for 2009-10 incredibly 15 years later, and then after 22 months delay in publication, a pitiful performance. In producing WGAs though the UK now leads all other countries, including those said to be more ‘advanced’.      WGAs exactly equate to group consolidated accounts which are the norm. WGBs never materialised and now after the second year’s accounts the Public Accounts Committee has revealed the appalling state of affairs. Consolidated accounts are even now regarded defensively by the Treasury as  academic and operationally purposeless,  rather than integral to decision-making. Reports by CIPFA and the LGA are:       

 The impression is of people who couldn’t run a grocer’s shop in Grantham. Economic religion supplants sound management. We are  exposed to the risk of having our savings and investments raided as in Cyprus, or by the mooted EU wealth tax. On 22nd February I said following the letter from Chancellor George Osborne: “…there is failure to acknowledge that the Treasury is the weakest link.”  

 More advanced” seems to mean having, but not getting beyond, such as multiple area income taxes instead of simply just one.  Urgently necessary decentralisation which is currently only talked about ad nauseam in such as the HC Constitution Committee must proceed with care  or the debt and deficit  will become even more threatening and unmanageable. Even now a ‘walking away’ from Lord Heseltine’s LEPs (Local Enterprise Partnerships) is detected. In 2005 I gave Sir Michael Lyons, face to face,  my disregarded scheme for local funding. This acknowledged the unavoidable overall central responsibility for macro management of the public finances while providing for complete decentralisation of detailed responsibility and accountability (for local authorities).

Peter Webb   26th April 2013