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I spent many a happy hour over the summer going through the annual reports and accounts of the major Whitehall departments. A strange way, you might think, to spend the hot summer days, but it's hard to break habits formed over many years. I used to immerse myself in the accounts as an auditor as part of my development - as a director general (DG) to see what I could learn and shamelessly steal from my colleagues, and as Head of Profession to track our progress and continuous improvement as a cross-government finance team in one of our core tasks.
A lot has changed from the days when I first started doing this. When we had cash appropriation accounts produced, audited and published with a simple 'properly presents' opinion at a relatively leisurely pace sometime early in the deep winter.
We have been through what was then the revolution of resource accounting and budgeting; the full professionalisation of the reporting function; the laying of accounts pre-recess (with apologies to the Department for Education); compliance with International Financial Reporting Standards; and the production of Whole of Government Accounts.
And as I went through the accounts there was a lot to be proud of. The number and severity of qualifications was low, just one 'true and fair' for MOD and a regularity opinion apiece for DWP (fraud and error) and DEFRA (disallowance penalties) - this is pending publication of DFE. All, again bar, DfE published pre-recess. On the downside although there was some decluttering as part of the HMT streamlining work, too many still had the feel of a coat stand with so much piled on it was about to fall over.
Then, a couple of weeks ago I started on some joint work that CIPFA are undertaking with the Institute for Government. This is looking at the pressures faced by a selection of public services over the 'austerity' years so far and how they have responded. On the face of it quite simple. Baseline spend in year zero as shown in the accounts uplifted for change in demand and activity to give a counterfactual for the end year which, when compared with actual spend in the end year leaves a gap met by some combination of quality/service change or efficiency. I expected the spend element of this work to be the easiest.
What I found going through the accounts of the individual departments and other national bodies, such as NHS England and the National Offender Management Service, was that you could not pull out simply, and on a consistent basis over time, spending on schools, hospitals, adult social care, prisons and policing. There was lots of other information. There was lots of other segmentation of reporting - irritatingly changing over time - but what was missing was some of the the key information that you might think would interest potential users in Parliament and the media. As this CIPFA/IFG work progresses it will be interesting to see how much we can use the Accounts or need to draw on spend data produced by economists.
Does this matter? I think it does. The accounts should be a source of true and fair information to help inform public and political debate, on the use of taxpayer’s money and performance of public services, an essential part of our democracy. But, we know that they are used little by Parliament and that the debate on public service expenditure is often ill-informed. The move to resource accounting and budgeting at the turn of the century was meant to be not just about a shift to accruals accounting but was also intended as a means of enhancing both decision-making and accountability. Did we lose our way in this? Have we focused too much on compliance with rules and on applying practice in other sectors rather in what users might need?
Have we ended with publishing a lot of information, but not the really useful stuff?