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£10.9bn of unpaid tax written off by government? Who cares!

The Treasury does not adequately monitor the way it spends public money, according to MPs.

If there was ever an anti-climax, it was the Whole of Government Accounts (WGA). The publication of a report detailing exactly how the government spends its money should, by rights, have set the agenda in a time of deep public spending cuts. After all, it was the first time that Treasury officials, ministers, MPs, or the public were able to look at the total cost of policies over time. But it was not so: published in November last year, a full 20 months after the end of the financial year it covered (2009/10), the report failed to make an impact.

Today, the Public Accounts Committee, a powerful panel of MPs, has published an assessment of why that might be.

On first glance, it is difficult to understand why the report has not had more of an impact. It found:

  • £10.9bn of unpaid tax was written off by government
  • The government is expected to pay £15.7bn to settling outstanding claims for clinical negligence
  • Future commitments under PFI schemes totals £131.5bn -- four times the value of the assets secured through the deals

Most worryingly, today's report notes that the Treasury failed to spot these trends, or to do anything with the data in its possession. Apparently the Treasury "showed surprise" at the £10.9bn of unpaid tax that was written off, and had no knowledge of trends in clinical negligence claims or of plans to reduce the cost to the taxpayer. The report said:

We were surprised to find that the Treasury did not have a grip on trends in some key areas of risk or plans for managing them.

Essentially, the data was assembled, but the Treasury did not do anything with it, such as identifying risks to public funds, or requiring bodies included to show that they are addressing these risks.

Certainly, it was an ambitious project, with 1,500 bodies included. But the information is dated: it covers the last year of the Labour government but was not released until the coalition had been in power for nearly two years. This is more than double the nine months it takes other countries, such as France, the USA and America, to compile such reports. Even more importantly, publicly owned banks and Network Rail were omitted, so it fails to give an accurate picture of public spending. The National Audit Office is damning on this point:

Of particular concern is that the WGA significantly understates the true value of public assets and liabilities by excluding the publicly owned banks, the Bank of England and Network Rail which, in the opinion of the Comptroller and Auditor General, are owned and controlled by government. It also gives limited analysis of spending across the main functions of government, such as defence and education, or on services such as consultancy, which would make the account more useful to the reader.

"Information is power," said David Cameron in July last year. "It lets people hold the powerful to account, giving them the tools they need to take on politicians and bureaucrats." It's a laudable sentiment, but clearly there is a very long way to go before we are close to achieving it. Assembling data is one thing: making use of it quite another.