BusinessCompany NewsTreasury faces grilling over accounting policies

Treasury faces grilling over accounting policies

Treasury officials will be grilled next week over claims that chancellor Gordon Brown engaged in 'Enron-style attempts to magic up to £21bn of borrowing off the government's books'.

Link: Green Budget: Govt accused of ‘Enron-style’ accounting

Liberal Democrat shadow chief secretary David Laws will challenge the decision to place a contingent liability of £21bn, in the shape of Network Rail funding, off the balance sheet, instead of more than doubling public borrowing – already up £11bn.

Laws has released a letter from Alan Beard, head of accountancy at the Department for Transport, which Laws claimed ‘blew apart’ the government’s plans to exclude up to £21bn of Network Rail borrowings from the government’s own borrowing figures.

Written to the chief executive of the Statistics Commission on 29 October 2002, it makes clear that the Office for National Statistics was wrong to assume that financial support facilities made available by the government to Network Rail were unlikely to be called upon.

Laws said this was ‘a huge embarrassment for the ONS and a massive blow to Gordon Brown’s ‘Enron-style’ attempts to magic up to £21bn of borrowing off the government’s books”.

The Tory MP has written to the Treasury calling for a statement from Brown indicating that he was going to put Network Rail back on the books.

In its defence, the Department of Transport has insisted its accounting practices are in line with European guidelines

The committee will also receive advice from comptroller and auditor general Sir John Bourn.

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