The importance of a moment to account

The Institute of Chartered Accountants plead for reform of public accounting in the midst of economic flux

Sustainability, transparency and reform have been held up as the shining beacons of our economic recovery. Our politics, our budget and our ethos are placed back on drawing boards across the country in the quest to return the UK to its heyday of steady economic growth. The Institute of Chartered Accountants in England and Wales, however, offer some brief words of caution.

Whilst our wild ideas about the importance of spending or cuts, the role of elections and representation and the significance public or private sector investment are important, there are some basic changes which have to happen before they can make lasting change. We have to set our ideological angst and meta-debates to one side for a moment, and take a look at the books.

Architects of international financial reporting standards have responded to the crisis by reforming the information and presentation of accounts across the world. Britain seems to lack the political will to get behind this change, yet improved financial reporting would make the nation’s accounts more consistent with those of the fifty countries which have already adopted the new standards laid out by the International Public Sector Accounting Standards Board. Greater consistency and greater comparability gained from international financial reporting will help on the road to recovery by increasing confidence and transparency.

Better financial training for all public servants is an intrinsic part of this process, the ICAEW argue. This training, with a long-term change in attitude towards our accounts, will help to improve understandings of public sector finances and, with that, understanding of policy. Once our public servants, and the international community, can access accounts more consistently, we can report with greater confidence on the state of the economy.

Sustainability, transparency and reform have a right to be seen as a beacon of recovery. Passionate debates on the right course for the country need to be had but, for the sake of our understanding and the happiness of our accountants, let's take a look at the books first.

Dusty ledgers, sadly no longer the tools of accounting. Photograph: Getty Images

Helen Robb reads PPE at Oxford University where she is deputy editor of ISIS magazine.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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