MPs have voted to implement massive accounting changes aligning government
financial reporting and Parliamentary spending controls — but leaving
misalignments totaling £22bn.
Financial secretary Mark Hoban , himself an accountant, said in the Commons
the changes would simplify and align as much as possible of the financial public
spending control system and implement the
Line of Sight project.
The project was designed to simplify government financial reporting on plans,
estimates and spending outcomes and was begun in 2007 under Labour.
The bulk of the misalignment involves £19bn in capital grants to the private
sector, local government and public corporations — treated as resource spending
in departmental accounts to reflect international financial reporting standards,
but capital spending in budgets to reflect national accounts treatment.
Hoban said the framework project “represents an excellent opportunity to
achieve greater consistency” with the extension of departmental accounting to
include non-departmental pubic bodies, and other bodies classified to central
government, bringing them within the coverage of estimates presented to
Parliament for approval.
He said the project, with cross-party backing, would “enhance consistency and
transparency at all stages”, removing inconsistency totaling £500bn between
national accounts produced by the Office of National Statistics, budgets defined
by the Treasury, supply estimates in tune with UK GAAP and resource accounts
following UK GAAP adapted for the public sector.
New Public Accounts Committee chairwoman Margaret Hodge said the changes
would ensure the government is better held to account.
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