Statement on HMT: Whole of Government Accounts 2011-12

The Whole of Government accounts (WGA) for 2011-12 was produced more quickly and contains better information than the previous two attempts, but it still has a long way to go before it is genuinely useful for my committee and government more widely. The data is not yet good enough to give a complete and detailed picture of government’s financial position. I fail to see what justification there can be for bodies such as Network Rail and the publically-owned banks to remain outside the WGA.

The Accounts contain some shocking figures. Public sector pension liabilities stand at £1 trillion and the cost of nuclear decommissioning has gone up to £64.3 billion. With increasing financial pressure on the NHS it is disappointing that the cost to the taxpayer of settling outstanding claims for clinical negligence has gone up yet again, to an estimated £19.4 billion.

The total deficit in 2011-12, once one-off adjustments such as a £126 billion gain from changing the index rate used for public sector pensions, was £8 billion less than the previous year. It now sits at £185 billion. Staff costs came down by 2% in 2011-12, compared to the year before but the Government needs to do more to ensure it makes longer-term, more sustainable savings. 

The WGA has been qualified again for a number of reasons that the Treasury must now address. For example, inconsistent valuation of local government infrastructure could put the accounts out by as much as £200 billion and a lack of evidence means we can’t be sure what the true value of school assets is.

It took the Treasury 16 months after the end of the financial year to prepare the latest WGA. This is an improvement on previous years, but still a long way off the Treasury’s 9 month target. HM Treasury needs to speed up the preparation of these accounts, whilst also making further improvements to the transparency and accuracy of the data.

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