The switch, which has taken over seven years to implement, marks the biggest overhaul of financial management in Whitehall since Gladstone’s reforms in the mid-1860s.
The system, which went through a ‘dry run’ last year, is designed to ensure the full economic costs of government activity are measured in a way similar to the private sector by including non-cash costs and measuring the full cost of holding and using assets.
As part of the process, the government has been forced to value all its assets, from Whitehall offices to military equipment.
The results will be published shortly in the government’s Register of Assets, arguable the first such register to be produced since Norman times.
Officials at the Treasury describe the move as a significant milestone, saying that there has been a quantum leap in government departments’ ability to produce and use financial information.
However, Sir John Bourn, head of the National Audit Office, has warned there is some way to go before the new system was functioning properly.
In his last general report, Sir John says: ‘I remain concerned at an over-reliance on too few key personnel and a lack of technically competent supporting staff in departments to prepare accounts.’
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