Skip to main content

Accounting for public spending across Government hit by audit delays and “poor” use of IT

14 October 2022

In a report today the Public Accounts Committee says “significant delays in publishing” the 2019-20 Whole of Government Accounts is undermining the value of “a uniquely comprehensive view of how government manages taxpayer’s money and of the position of public finances”.

The pandemic exacerbated existing failures in the local audit market, with only 45% of 2019-20 Local Government audits in England and Wales completed by the target date and just 9% of 2020-21 audits completed by the target of September 2021. The WGA is therefore increasingly unreliable and incomplete – excluding 23 Local Authorities altogether.

Some delays were due to the impacts of COVID-19 on finance departments’ priorities and capacities but were made worse by the Treasury's poor implementation of the new IT system, OSCAR II. Delays reduce the value and transparency of information in the WGA to the public and to decision makers in government, and reduces the certainty of any consequent insights, conclusions, or decisions.

The Committee says it is critical that the Treasury “improves its project management to meet future timetables” and calls for enhanced reporting on key issues including the impact of inflation on budgets, spending and pay reviews, government emissions and climate change, fraud, and the long-term costs of the Covid response. The Treasury should ensure commentary on key targets, such as capital receipts on property disposals, include current targets and proposals to keep the WGA current despite publication delays.

In May 2022, the Government announced that it intends to cut 91,000 jobs from the civil service over the next three years – a scale of headcount reduction that has the “potential to bring about significant consequences for departmental service quality and delivery”. But the Treasury admits it does not yet understand the scale or cost of redundancies likely to be required to achieve the reduction, what the impact on delivery of public services might be or how to mitigate those effects.

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “Failures in local government audit have left councils operating in the dark, without the management information needed to make key spending decisions in the round and balance their books. Now we see the same picture emerging in the cross-government national accounts.

“We still desperately need to see the big picture as the Government balances one massive intervention after another – from the pandemic response to the interrelated energy, climate, and cost-of-living crises we face now and into the future. The public also deserves a clear and transparent record of the full costs and liabilities that generations of current and future taxpayers have been committed to.”

Further information

Image: Parliament/Tyler Allicock