ICAEW analyses government finances
- Publish date: 11 November 2016
- Archived on: 01 February 2018
In its expert analysis of the UK's Whole of Government Accounts (WGA) and debt funding strategy for the IFS Green Budget 2017, ICAEW has called for a review of the treasury management strategy and suggested that the WGA could play a more effective role in informing public finance decisions.
For the third year running, ICAEW has contributed to the IFS Green Budget, the long-running and highly-respected assessment of fiscal issues likely to be addressed by the Chancellor of the Exchequer in the Budget.
For the 2017 edition, ICAEW has provided chapters examining:
Whole of Government Accounts
The WGA 2014-2015 was published in May 2016 and confirmed that long-term liabilities associated with covering public sector pensions, nuclear decommissioning and medical negligence settlements, mean that at 31 March 2015 the UK's total liabilities had reached £3.6 trillion - the equivalent of £130,000 per household.
In its analysis, ICAEW highlights the importance of the WGA figures in ensuring effective, long-term decision making related to public finances.
ICAEW Public Sector Director, Ross Campbell, says: "To restore trust in Government, and to give taxpayers a clear picture of how much liability the Government has assumed on their behalf, it’s important that more emphasis be placed on the WGA.”
The chapter concludes that the effectiveness of WGA as a tool to support good public financial management would be improved by a better commentary and by more timely preparation.
Over the next five years the government has to raise £646bn in new debt, this is an £11bn increase on the amount of new debt it raised in the past five years despite a drop in the amount needed to fund the UK's fiscal debt.
ICAEW has examined the government’s current external debt position and the cost of financing that debt, as well as plans to raise fresh funds and risks, such as exposures to changes in inflation and interest rates.
It concludes that the government should review the treasury management strategy (first published in 1995) and undertake country-level stress tests to assess the UK's resilience to adverse developments in credit markets.