£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.

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

Getty
Show Hide image

Want to beat child poverty? End the freeze on working-age benefits

Freezing working-age benefits at a time of rising prices is both economically and morally unsound. 

We serve in politics to change lives. Yet for too long, many people and parts of Britain have felt ignored. Our response to Brexit must respond to their concerns and match their aspirations. By doing so, we can unite the country and build a fairer Britain.

Our future success as a country depends on making the most of all our talents. So we should begin with a simple goal – that child poverty must not be a feature of our country’s future.

The Institute for Fiscal Studies projects that relative child poverty will see the biggest increase in a generation in this Parliament. That is why it is so troubling that poverty has almost disappeared from the political agenda under David Cameron, and now Theresa May.

The last Labour Government’s record reminds us what can be achieved. Labour delivered the biggest improvement of any EU nation in lifting one million children out of poverty, transforming so many lives. Child poverty should scar our conscience as much as it does our children’s futures. So we have a duty to this generation to make progress once again.

In my Barnsley constituency, we have led a campaign bringing together Labour party members, community groups, and the local Labour Council to take action. My constituency party recently published its second child poverty report, which included contributions from across our community on addressing this challenge.

Ideas ranged from new requirements on developments for affordable housing, to expanding childcare, and the great example set by retired teachers lending their expertise to tutor local students. When more than 200 children in my constituency fall behind in language skills before they even start school, that local effort must be supported at the national level.

In order to build a consensus around renewed action, I will be introducing a private member’s bill in Parliament. It will set a new child poverty target, with requirements to regularly measure progress and report against the impact of policy choices.

I hope to work on a cross-party basis to share expertise and build pressure for action. In response, I hope that the Government will make this a priority in order to meet the Prime Minister’s commitment to make Britain a country that works for everyone.

The Autumn Statement in two months’ time is an opportunity to signal a new approach. Planned changes to tax and benefits over the next four years will take more than one pound in every ten pounds from the pockets of the poorest families. That is divisive and short-sighted, particularly with prices at the tills expected to rise.

Therefore the Chancellor should make a clear commitment to those who have been left behind by ending the freeze on working-age benefits. That would not only be morally right, but also sound economics.

It is estimated that one pound in every five pounds of public spending is associated with poverty. As well as redirecting public spending, poverty worsens the key economic challenges we face. It lowers productivity and limits spending power, which undermine the strong economy we need for the future.

Yet the human cost of child poverty is the greatest of all. When a Sure Start children’s centre is lost, it closes a door on opportunity. That is penny wise but pound foolish and it must end now.

The smarter approach is to recognise that a child’s earliest years are critical to their future life chances. The weight of expert opinion in favour of early intervention is overwhelming. So that must be our priority, because it is a smart investment for the future and it will change lives today.

This is the cause of our times. To end child poverty so that no-one is locked out of the opportunity for a better future. To stand in the way of a Government that seeks to pass by on the other side. Then to be in position to replace the Tories at the next election.

By doing so, we can answer that demand for change from people across our country. And we can provide security, opportunity, and hope to those who need it most.

That is how we can begin to build a fairer Britain.
 
 

Dan Jarvis is the Labour MP for Barnsley Central and a former Major in the Parachute Regiment.