Spending review highlights MoD accounts change

Unveiled by Gordon Brown last week, the review saw the publication of departmental expenditure limits calculated using resource accounts for the first time and revealed the extent to which the new procedures would change the appearance of government budgets.

The Treasury pushed ahead using the new methods despite revelations in June that many departments were still struggling with resource accounting methods.

The National Audit Office revealed it had qualified the 1998/99 ‘dry run’ resource accounts of 30 out of 52 departments.

A commons committee was told that for 1999/2000 nine to 15 departments would have their dry-run resource accounts qualified. The new procedures are programmed to replace old methods by 2001/02.

However, the Treasury this week said the spending review had gone smoothly and that ‘few people’ had failed to understand the changes.

‘Changing the system was always going to have its risks and that’s why we went to great lengths to help people understand the new system.’

Spending review papers issued by the Treasury included a bundle on resource accounting and how it would change the look of budgets. Billions will shift to the MoD, the Department of Education sees its expenditure limit increase by £35m and the Department of Health’s capital expenditure is expanded by £1bn.

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