Clear line of sight:
Aligning budgets, Estimates and
accounts
Ken Beeton & Doug Rayner
OECD Public Sector Accruals Symposium – 3 March 2008
The opportunity (1)
“The Government will simplify its reporting
to Parliament, ensuring that it reports
in a more consistent fashion, in line
with the fiscal rules, at all three stages
in the process: on plans, Estimates and
actual expenditure outturns”
“The Governance of Britain” July 2007
2
The opportunity (2)
“We recommend that the Government …
replace the current system of authorisation
based primarily on Estimates with one linked
more clearly with the public expenditure
planning and control system, so that the
House of Commons would … authorise
Departmental Expenditure Limits and …
Annually Managed Expenditure”
Treasury Committee Report on the 2007 CSR, June 2007
3
The problem we’re aiming to solve
•
•
Different bases on which financial information is
presented to Parliament and other stakeholders
Government financial documents published in different
formats, on many different occasions:
- different sets of numbers
- makes spending control and Parliamentary monitoring
more difficult
- value for money incentives are weakened or non-existent
- accountability not straightforward – makes public debate
more difficult
- burdensome and costly
4
The different frameworks, and the
purposes they serve
The various frameworks have different purposes and rules:
National Accounts: the fiscal rules are measured by
reference to the National Accounts
Budgets: are used to control public spending and need to align
with the National Accounts to support the fiscal rules
Estimates: seek annual Parliamentary authority for
departments’ spending that isn’t authorised elsewhere
Resource Accounts: report departments’ actual spend for the
year on a ‘commercial’ basis, adapted for the public sector,
and compare outturn with Estimates
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The problem we are trying to solve –
Budgets, Estimates & Accounts
Less than 0.1
-0.1
0.2
Budgets
Estimates
346
35
Amounts
included under
each system
(£ billion)
184
-5
Resource Accounts
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The problem we are trying to solve –
Reporting
PUBLICATION
DATE PUBLISHED
Spring/Summer publications
Main Estimates
Apr/May (5 weeks after Budget)
Supplementary Budgetary Information (SBI)
Apr/May (5 weeks after Budget)
Public Expenditure Statistical Analyses (PESA)
Apr/May (5 weeks after Budget)
Departmental Reports
May (just after Main Estimates)
Summer Supplementary Estimates
June
Departmental Resource Accounts
June/July
Public Expenditure Outturn White Paper (PEOWP)
July
Autumn/Winter publications
Autumn Performance Reports (APRs)
November
Winter Supplementary Estimates
November
Vote on Account
November
Spring Supplementary Estimates
February
Statement of Excesses
February
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What success might look like –
Developing the Vision
“To create a single, coherent financial regime,
that is effective, efficient and transparent,
enhances accountability to Parliament and
the public, and underpins the Government’s
fiscal framework, incentivises good value for
money and supports delivery of excellent
public services by allowing managers to
manage.”
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What success might look like – what
this Vision would mean
Significant benefits of better alignment:
•
•
•
•
•
•
A simpler and more transparent system, with a single set of numbers
that can be tracked through the system from start to finish
A significantly enhanced ability to control public spending in line with
Government’s controls and the way departments manage themselves
Improved risk management and stronger value for money incentives
Two or, at most, three main documents presented to Parliament by
departments each year
Better government, through improved democratic involvement for,
and accountability to, Parliament and the public
Cost effective financial regime, with no unnecessary burdens
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The “Top Down” Approach
Flexibility may be needed in some areas:
•
Can we meet the fiscal rules in other ways?
•
Are adaptations to IFRS acceptable in some
areas to achieve alignment?
All misalignments must be challenged rigorously, and
not pursued only if result would cause serious
damage or be manipulable
Any necessary residual reconciliations must be as
simple as possible
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Next Steps
•
Steering Committee and Project Board in place
•
Timetable – aiming to:
- complete detailed project planning by March 2008,
including early identification of legal risks
- 2008-09: negotiate design of new operating model,
leading to possible consultation paper
- 2009-10: implementation planning
- 2010-11: commence delivery (possibly phased),
subject to resolving legal and other issues
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