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CIPFA, the Chartered Institute of Public Finance and Accountancy, today welcomed the release of the latest set of Whole of Government Accounts (WGA) by the UK Government, but expressed concern at the rate at which public sector liabilities are increasing.
Analysis in a briefing note by CIPFA of the WGA shows that UK's public sector net liabilities, the gap between what the country owns and what it owes, increased by £224 billion in 2013/14 to £1.852 trillion. The yearly increase alone would equate to an additional £8,389 of financial liabilities for each household in Britain. In total the net public sector liabilities of the UK are equivalent to £69,363 for every household in the country.
The WGA published this week cover the financial year 2013/14 and show that over the course of the past five years (since 2009/10) the total net liabilities of the UK public sector have increased by £624 billion or by £23,370 per UK household.
The increase in public sector liabilities is mainly driven by an increase in government debt but also a £130 billion increase in pensions liabilities.
This detailed financial information comes from the UK WGA which are the most comprehensive set of audited consolidated government accounts published globally, covering the finances of all 5500 public entities in the UK public sector. These include central government departments and its arms-length bodies, local government bodies, the health sector and public corporations such as the Bank of England.
More generally the publication of WGA improves the transparency of government spending decisions and their impacts on the public finances by providing a more complete picture of the Government’s financial position than the National Accounts, which is also audited.
Responding to the publication of the latest WGA, Rob Whiteman, CIPFA's CEO said:
"We whole heartedly welcome the publication of the latest WGA, they are the most up to date and true and fair record of the financial state of the UK Government and public sector.
"That this publication comes almost a year after the end of the financial year they cover demonstrates just how important it is that these documents are published as promptly as possible.
"The analysis of the data contained in CIPFA’s Briefing on the Whole of Government Accounts starkly illustrate that while our net expenditure is now on a downward trend net liabilities continue to increase.
"These increasing net liabilities forcefully underline the need for any future government to pay close attention to managing the UK’s balance sheet risk particularly in the area of public service pensions where there remains a serious concern about longer term sustainability even given the recent reforms.
"Importantly, CIPFA believes that any future Government must urgently look at ways in which it can actively make better use of the WGA so that as a country we plan for our future and move beyond the short-term and politicised nature of our current Budgeting system."
You can download a copy of CIPFA's Whole of Government Accounts briefing from our website.
You can also find more information on CIPFA and our policy briefings on our website.
You and find the HM Treasury publication of Whole of Government Accounts: year ended 31 March 2014 on the gov.uk website.
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, we champion high performance in public services, translating our experience and insight into clear advice and practical services. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.
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