Whole of government accounts developments in the UK: conceptual, technical and timetable issues

Abstract

When published, the UK's much-delayed whole of government accounts (WGA) will provide valuable incremental information on UK public finances. The WGA will complement existing fiscal indicators such as net debt, which excludes public assets other than liquid financial assets, by establishing a more complete picture. Emphasising the relevance of accounting consolidation to the public sector, this article assesses potential uses of WGA and discusses why the UK WGA timetable for publication—originally 2005–06 and now 2009–10—slipped so badly. A series of conceptual and technical issues is examined, including how the WGA boundary is defined; the emphasis the UK places on alignment with the national accounts; and the proposed treatment of taxes paid by entities within the WGA consolidation.

Notes

∗Adaptations occur when the required accounting treatment diverges from IFRS. Interpretations occur where IFRS requirements are translated into public sector terminology and/or where choices of accounting treatment available in IFRS are narrowed for reasons of consistency across the public sector.

∗However, Treasury (2003b, chart 3.3, p. 23) notes that ‘Comprehensive projections usually only include financial assets’; the focus of the projections is upon government solvency rather than inter-generational fairness.

∗Network Rail was design-engineered by the Treasury so that it would not meet the ONS's criteria for being in the public sector. However, the then C&AG stated that Network Rail met UK GAAP criteria for consolidation (Bourn and Cook, 2002).

Additional information

Notes on contributors

David Heald

He is a member of the Financial Reporting Advisory Board and specialist adviser to the Treasury Committee of the House of Commons, but writes entirely in a personal capacity.