UK public sector fiscal reporting: clear and contradictory

Figures & data

Table 1. Institutional logics in the fiscal reporting field.

Characteristic	Public administrative logic	Managerial logic	Professional logic	National logic
Source of identity	Government is bureaucratic	Government is a business	Accounting profession	Statistical description of economies
Source of legitimacy	Serving the public interest via policy making and the democratic system	Legitimacy by results	Professional expertise	Basing policy decisions on financial/statistical information which informs the setting of the budget
Source of authority	Politicians, Parliament, legislation and government regulatory bodies	Government regulatory bodies	Financial Reporting Advisory Board, HM Treasury, National Audit Office, accounting profession and government regulation	International regulators (e.g. Eurostat, European Commission, United Nations Statistics Division)
Values/rationality	Democracy, legality, continuity and stability	Performance, efficiency, effectiveness, serving customers and growth	Transparency and faithful representation of financial position/performance	Detail, relevance, accuracy and frequency of results
Basis of attention	Rules, inputs, duties and internal orientation	External orientation, fixed single goals, outputs and outcomes	Providing legitimacy	Fiscal rule setting and monitoring of the deficit
Basis of strategy	Centralised, hierarchical system governed by law, politically driven and operates within tight public sector controls			Compliance to adhere to measures of European System of Accounts 2010

Source: Adapted from Ezzamel et al. (2012).

Table 2. Analysis of interviewees.

Category	Number of interviews	Number of interviewees	Codes used for analysis
Government departments	11	13	D1-D11
Government oversight bodies	3	5	GOB1-GOB5
Parliamentary oversight bodies	4	5	POB1-POB5
Academic advisers	4	4	A1-A4
Total	22	27

Table 3. Main areas of misalignment pre- and post-CLOS.

Area	Pre-CLOS	Approx. value of misalignment	Aligned	Post-CLOS
Non-voted expenditure (e.g. National Loans Fund and National Insurance Fund)	Shown in the budgets and accounts, but not the Estimates. The departments largely affected by this were the Department for Work and Pensions and HM Revenue and Customs.	£75bn	Yes	The coverage of the Estimates has been widened to include spending that was not previously voted through the Estimates. To protect the statutory position, the Estimates are now presented in two parts (i.e. voted and non-voted).
NDPB spending/Grant-in-aid to NDPB’s	Shown in the budgets but not the Estimates or accounts as NDPB spending fell outside the consolidation boundary.	£40bn	Yes	The expenditure of NDPBs and other central government bodies previously outside the boundary are now consolidated into Estimates and resource accounts.
Provisions^a	Shown in the budgets as part of a department’s DEL. Shown in the Estimates on the basis that the impact on public expenditure arose when the provision was paid. Shown in the resource accounts when the provision was paid.	£22bn	Yes	Provisions are now treated as Annually Managed Expenditure, and continue to be included in the Estimates; and scoring cash payments when they arise within DEL.
Grants to devolved administrations (DAs)	Shown within the Estimates. Shown in the resource accounts. Not shown in departmental budgets.	£47bn	No	Due to the DAs unique constitutional position, aligning grants to DAs would not meet the requirements of Parliament. Therefore, grant payments to the DAs are included as separate “non-budget” voted items within the Ministry of Justice and Northern Ireland Office Estimates and resource accounts. This results in a misalignment between budgets and Estimates/accounts.
Capital grants to the private sector, local authorities and Public Corporations	Treated as resource expenditure in the resource accounts and Estimates, reflecting UK GAAP/IFRS requirements. Considered to be capital in budgets, reflecting the treatment in the national accounts.	£19bn	No	The approach is that these grants should be treated as capital in budgets and in Estimates (included as part of a voted capital DEL total), but should continue to be treated as resource expenditure in resource accounts in line with IFRS.
Prior Period Adjustments^b (PPA)	Shown within the Estimates in the year in which they were identified to obtain the spending authority. This removed the need to re-open resource accounts that had been closed and allowed Parliamentary approval for any changes in resources financed by Estimates due to the adjustments. Not shown within the budget.	£35bn	No	PPAs are reviewed on a case-by-case basis. Any PPAs arising from a change of accounting policy or a new or modified accounting standard are no longer voted, but appear as a Note to the Estimate, reporting the reason for the change and the impact for up to the previous five years. PPAs arising from an error in a previous period, an accounting policy change that was initiated by the department or otherwise resulted from a departmental decision are required to seek Parliamentary authority for the provision.

^a Departments are required, under accounting rules, to make provisions for current obligations arising from past events, where it is probable that payment will need to be made in the future, and such payments are measurable (HMT, 2009).

^b Prior Period Adjustments are material adjustments applicable to past years and arise from changes to accounting policies or from the correction of fundamental errors (HMT, 2009).

Table 4. Schedule of publications.

	Publication date
	Pre-CLOS	Post-CLOS
Main Estimates	April/May^a	April/May^a
Supplementary Budgetary Information	April/May^a
Public Expenditure Statistical Analyses	April/May^a	April/May^a
Departmental Reports	May
Department Resource Accounts	June/July
Departmental Reports and Accounts		Mid-June
Summer Supplementary Estimates	June
Public Expenditure Outturn White Paper	July
Winter Supplementary Estimates	November
Vote on Account	November
Spring Supplementary Estimates	February
Statement of Excesses	February
Supplementary Estimates, Vote on Account and Statement of Excesses		January

^a 5 weeks after the budget.

Source: HMT (2009, p. 12 and p. 35).

Ezzamel, M., Robson, K., & Stapleton, P. (2012). The logics of budgeting: Theorization and practice variation in the education field. Accounting, Organizations and Society, 37(5), 281–303. https://doi.org/10.1016/j.aos.2012.03.005

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HM Treasury. (2009). Alignment (clear line of sight) project (Cm 7567). The Stationery Office.

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