Treasury’s lack of grip shown up by accounts say MPs

The department was apparently not fully aware of the estimate until after it appeared in the Whole of Government Accounts (WGA) for 2009-10.

It also had “no knowledge” of whether plans were in place to cut the taxpayer’s huge £15.7 billion liability for clinical negligence claims, the Public Accounts Committee (PAC) said.

The criticism came in a report on the accounts – which were compiled and published for the first time last year.

The cross-party MPs welcomed the potential of the WGA for helping the Government identify the “risks it needs to manage”.

But officials’ evidence had suggested their understanding of some aspects was “poor”.

“For instance the Treasury showed surprise at the estimated £10.9 billion in outstanding tax and it had no knowledge of recent trends in clinical negligence claims or whether plans were in place to reduce the estimated £15.7 billion cost to taxpayers of meeting these claims,” the MPs said.

“The Treasury should use the WGA specifically to identify key risks to public funds and ensure bodies included in the WGA can demonstrate that they are addressing them effectively.”

The report added: “We were surprised to find that Treasury did not have a grip on trends in some key areas of risk or plans for managing them.”

The committee complained that it had taken the Government 20 months to prepare the accounts –twice as long as in other countries such as France and the US.

PAC chair Margaret Hodge said the document also “currently falls short of giving a true and fair view of the UK’s financial position”.

“The Treasury has departed from accounting standards by leaving out of the accounts such bodies as Network Rail and the publicly-owned banks,” the Labour MP said.

“We want the Government to provide the necessary information so that these accounts are comprehensive and credible.”

The report highlighted massive swings in liabilities for public sector pensions and nuclear decommissioning, partly due to officials’ “inconsistent” use of discount rates when calculating the figures.