The Whole of Government Accounts (WGA) consolidates 6,000 public bodies and is perhaps the single most important public financial reporting document for the UK. It is the only set of accounts of any country in the world to include the finances of central and local government, giving a complete picture of the country’s financial position.
Gillian Fawcett, Head of Governments Faculty said: "Before picking through the bones of the piece, it is just as well to give the government credit for this world-leading policy – but also to lament its reluctance to use the accounts effectively to inform policy decisions and longer-term financial planning.”
It is a source of exasperation for accountants therefore, that after six years of developing the WGA to a high standard, they are still not used effectively to inform fiscal decision making. There are a number of likely reasons. Policymakers and politicians alike are used to the statistical models. They are aware that statistics provide a neat way of explaining decisions to the public.
There’s little incentive to make life harder when our international competitors are content with financial models that lead to poor decisions, misallocated resources and enhanced fiscal risk.
So, what do the 2014/15 accounts tell us is in store? Well, one looming crisis is easy to spot. Public-sector pension liabilities are growing at an alarming rate, from £961bn in 2010/11 to £1.5trn in 2014/15. This is despite significant pension reforms that civil servants will be well aware of.
Employers are failing to work down liabilities, focusing instead on the pressing problems of the day. These problems may feel somewhat less urgent in decades to come when paying pensions simply becomes unaffordable. This is only one example of what we can glean from the WGA balance sheet and this is why by unleashing a whole wide world of data makes WGA important now and in the future.