Government blocks watchdog’s amendments to Resource and Accounts Bill

Economic Secretary Melanie Johnson refused to accept a requirement that departments produce a cash flow statement – the equivalent of commercial profit and loss accounts.

But she accepted changes requiring the accounts to reflect ‘a true and fair view’, making departments report changes between estimated and actual, spending and dropping a requirement for the Comptroller and Auditor general to report to the Treasury as well as Parliament.

Johnson insisted requiring a cash flow statement would rob resource accounts of flexibility.

And she pointed to the Accounting Standards Board consultation on merging profit and loss accounts and the statement on total recognised gains and losses into one statement of financial performance.

She declared: ‘We are trying to include measures that will last for a considerable time instead of reflecting the processes, standards and procedures that details current practices.’

PAC Chairman, former Tory minister David Davis said the cash flow statement would bring the government Resources and Accounts Bill more in line with commercial practice.

He was backed by senior Labour MP and PAC memeber Alan Williams, who complained that one of the reasons behind their concerns if the failure of the Treasury to respond to National Audit Office amendments relating to quangos.

Johnson said she would table later amendments requiring a statement on variances and giving statutory force to the need for ‘a true and fair view’.

She also proposed an amendment giving effect to a PAC demand for the Comptroller and Auditor General to have the duty to ensure the regularity of expenditure.

MPs are continuing to debate a series of other all-party PAC proposals.

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