Whitehall given go-ahead to transfer to resource accounting.
The transfer to resource accounting for Whitehall departments has finally been given the green light, but only after the government agreed to launch a review of accountability headed up by Lord Sharman, former senior partner of KPMG International, writes Gavin Hinks.
Changes in accounting will follow the Government Resources and Accounts Bill which has finally been passed by the House of Lords, on the slimmest of majorities, and given approval by a special Commons committee.
Endorsement comes despite the qualification of more than half of Whitehall’s accounts in a dry run last year.
The switch to commercial style accounting will go ahead from April of next year, but without extended powers for the head of the National Audit Office, which Tories, Liberal Democrats and the Commons Public Accounts Committee, had been pushing for.
David Davis, chairman of the PAC, has given the all clear for changes in accounting practice but only on condition that current levels of accountability are maintained and warned progress still had to be made in some government departments in coming to terms with resource accounts.
He welcomed the new accounting regime and said: ‘It will also increase the incentives on departments to use their resources well.
‘However, it will only be effective if all departments are able to produce reliable resource accounts. In many cases, substantial progress still needs to be made.’