RegulationAccounting StandardsTreasury headed for clash over PFI

Treasury headed for clash over PFI

The Office for National Statistics is likely to resist the changes in government accounting, expected to adopt IFRS in April

Government departments are headed for a clash with the Treasury over
accounting standards for private finance initiative projects.

While the Treasury continues to favour PFI, other departments seem less
convinced.

PFI projects account for about £30bn in off-balance-sheet debt. Bringing it
onto government books would break government’s rule that borrowing should not
exceed 40% of GDP, the FT reported.

The Financial Reporting Advisory Board, a government advisory panel, has
already backed moves to switch government accounting to IFRS, and is set to give
evidence of this at a Treasury committee meeting tomorrow.

The Office for National Statistics is however likely to resist the changes.
This would allow Treasury to ignore PFI debt while other government departments
would no longer care about whether projects were publicly or privately financed
as the debt would come onto their books and be subject to government capital
charges.

Further reading:

MPs to probe off balance sheet deals

Treasury to act on PFI project ruling

Darling catches himself off-balance

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