RegulationAccounting StandardsTories pledge to put PFIs on balance sheet

Tories pledge to put PFIs on balance sheet

Conservatives accuse Labour of covering up debt levels

A Conservative government would be transparent in public finances and place
controversial private finance initiatives on its balance sheet, the Tories
plegded today.

The comment follows an
Accountancy
Age story
, which revealed that the government would gloss over £32bn in PFI
debt through the use of softer accounting rules.

Shadow chief secretary to the Treasury, Philip Hammond accused the
government of misleading the public.

“Only a day after we discovered that the Prime Minister misled the country
about his plans for spending cuts, we find out the government is trying to hide
£32bn of debt off the balance sheet,” he said.

“Yet again, Labour is taking the public for fools. If they can’t be straight
about the scale of the problem, how will they ever solve Britain’s debt crisis?”

The Conservatives have promised to end such practice and place PFI
liabiliites on the balance sheet

Currently, the government plans on using international accounting standards
for its internal reporting but softer national rules for its external reporting.

Controversially, national account rules will not take into account PFI
arrangments which, it has been estimated, will leave £32bn pounds off the public
balance sheet.
The government will also be using softer national standards to underpin
borrowings.

The £32bn estimate is based on a report co-authored by former Treasury
adviser David Heald, who analysed 2007 numberrs to arrive at the figure.

The government says it has no choice but to use UK rules for for its public
reports. Heald disagrees.

Further reading

Darling’s £32bn ruse

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