The department treats the project – which brings together the accounts of some 1,500 public sector bodies into one financial position – as “an elaborate accounting exercise” rather than a meaningful tool for helping government manage the public finances more effectively, the PAC says.
“The WGA should be used to identify the nation's key financial risks, such as the spiralling cost of clinical negligence, £17.5bn in the accounts, and set out how they are being managed,” said PAC chair Margaret Hodge..
“It should also be used to help government make better spending choices by highlighting the financial consequences of past decisions, such as the £144.6bn currently owed under public finance initiative (PFI) schemes and the estimated £60.9bn cost of nuclear decommissioning.
“And it should allow us to track the government's performance in key areas such as tackling fraud and error, which costs the taxpayer some £21.2bn a year.”
The Treasury has now produced two sets of WGA but, according to the committee in its report on WGA 2010/2011, they are “impenetrable to most ordinary people” and fail to provide a true and complete picture of the nation’s finances.
For instance, while the latest set includes the Bank of England for the first time, it leaves out RBS, Lloyds Banking Group and Network Rail. These would normally be included under normal accounting rules and the Treasury was unable to come up with a convincing explanation for their absence.
It also took the Treasury 19 months to publish the WGA so the information was out of date which undermines their value and they were qualified for the second year running.
“This is not good enough,” Hodge said. “Treasury needs a clear plan for improving the timeliness, quality and completeness of the WGA, and how it will use this document to support the management of the nation's finances.
“It should make sure that departments are aware of what the headline figures mean for them and the accounts should be regularly considered by all departmental management boards.
“Some public bodies, such as academies, failed to provide complete and accurate accounts. The Treasury will need to ensure that effective sanctions and incentives are in place so that all bodies submit data that is complete, timely and auditable.”