MPs to probe off balance sheet deals

The way government accounts for private finance initiatives (PFI) is to be
probed by MPs next week in preparation for the huge overhaul to international
financial reporting standards.

Industry experts are set to appear before the Treasury select committee on 4
March, ahead of changes to government financial reporting due from April. Among
other things, the changes affect the way PFI projects are accounted for.

In spite of revisions to the definition of public sector net debt relating to
PFI liabilities in September 2006, it is believed that the full extent of PFI
exposure remains off the government’s balance sheet.

Witnesses appearing at the session include members of the Financial Reporting
Board and Office for National Statistics advisers.

Ken Wild of Deloitte, a member of FRAB, said it was ‘timely’ for the Treasury
to talk to FRAB as part of the process to achieve a system of public sector
accounting that is ‘sensible and easily interpreted’.

MPs will also be addressing the issue of the ‘statistical classification’ of
Northern Rock in the National Accounts.

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