HM Treasury News Release
128/98 30 July 1998
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WHOLE OF GOVERNMENT ACCOUNTS
The Chancellor of the Exchequer, Gordon Brown, announced today
the results of a joint study by the Treasury and the National
Audit Office into the development of Whole of Government
Accounts (WGA) for the UK.
Commenting on the Treasury's report, the Chancellor said:
"Developing Whole of Government Accounts covering the
whole public sector will be a major step in underpinning
the new fiscal framework outlined in the Economic and
Fiscal Strategy Report published in June. It will put the
UK amongst the forerunners in the field of countries who
are developing financial reporting which supports a new
enhanced fiscal framework. The new accounts will help to
deliver the Government's commitment to more transparent
fiscal reporting, using best practice accounting methods,
set out in the Code for Fiscal Stability published
alongside the Budget in March.
"I look forward to seeing the results of the further
research into developing Whole of Government Accounts once
the next phase of the work outlined in the report has been
completed."
The main conclusions of the Treasury's report are that:
the Government should proceed with work on the
development of Whole of Government Accounts;
the ultimate aim should be a full set of audited
accounts based on UK GAAP for the whole public sector
alongside improved but unaudited national accounts
based on statistical principles;
practical considerations suggest a dual approach to
developing GAAP-based Whole of Government Accounts,
with work being undertaken on a consolidation of the
accounts of central government into a Central
Government Account (CGA) alongside work in parallel
to establish a basis for consolidating other parts of
the public sector into a Whole of Government Account;
a decision on whether to produce a Central Government
Account for 2001-02 would be taken in 2000. If this
were not possible, an alternative would be to move
straight to Whole of Government Accounts, with the
first set of GAAP-based accounts produced for 2003-
04, if the decision to proceed was justified once a
full cost/benefit analysis had been completed;
the next step will be for a project team to be set up
and a detailed project plan drawn up to cover the
forward programme of action outlined in the report.
Notes to Editors
1. Whole of Government Accounts (WGA) are a set of
consolidated financial statements covering the whole of
the public sector. Central Government Accounts (CGA) are
a subset covering central government only.
2. The scoping study into Whole of Government Accounts was
carried out by the Treasury in consultation with the NAO
and other relevant bodies. The terms of reference for the
study were as follows:
"To examine the possibility, desirability,
practicalities, timescale and resource and other
implications of consolidating the accounts of
departments and agencies and other entities such as
non-departmental public bodies, public corporations
and local authorities, to enable the preparation of a
consolidated set of financial statements initially
for central government; and then, beyond that, to
look at the scope for extending this to general
government and the whole public sector ("whole of
government accounts").
The work will build on the information currently
contained in the Consolidated Fund and National Loans
Fund accounts and Supplementary Statements, and will
take account of:
- developments on resource accounting and
budgeting;
- the Government's key principles for stable
public finances;
- experience in other relevant countries; and
- the Government's undertakings to Parliament.
The initial study will be carried out jointly with
the National Audit Office in the case of the accounts
of central government bodies, as recommended by the
PAC; and in the case of other public sector bodies,
in consultation with other relevant auditing bodies
as appropriate, relevant sponsor departments and,
through them, with the bodies themselves.
The aim is for the initial scoping study to be
completed within a timescale which will enable
preliminary conclusions to be published by the Summer
of 1998."
3. Subject to the outcome of the further work outlined in the
scoping study report, the aim is for the first set of
fully audited Whole of Government Accounts on a GAAP basis
to be available and published for 2005-06, with unaudited
trial accounts on this basis produced from 2003-04
onwards. A CGA could be produced before this, with the
first dry run for 2001-02. The report recommends that the
proposed GAAP-based accounts should be prepared by the
Treasury, since the Treasury would have most ready access
to the necessary information.
4. The aim is for unaudited Whole of Government Accounts
based on national accounts data to be developed by the
Office for National Statistics (ONS), with a target date
of 2001-02 for the first set of published statistical
accounts.
5. Generally Accepted Accounting Practice in the UK (UK GAAP)
represents the accounting and disclosure requirements of
the Companies Act 1995 and accounting standards issues by
the Accounting Standards Board, supplemented by
accumulated professional judgement. It is accepted that
GAAP should be adapted to the particular needs of the UK
public sector.
# = pounds sterling