In its report on the latest set of Whole of Government Accounts (WGA), the Public Accounts Committee (PAC) says these ‘do not currently offer parliament real visibility’ over the government’s delivery of its deficit reduction measures under the current spending review.

Sumita Shah, ICAEW public sector policy manager, said: ‘At a time when the public finances, more than ever before, are in the public consciousness, the PAC report reinforces the need for greater financial discipline in Whitehall. The WGA should be one tool alongside future budgets and forecasts that enables parliament and the wider electorate to hold government to account for the delivery of its overall financial strategy.’

The 2012-13 WGA is the fourth to be produced and was published five weeks earlier than last year. The Treasury says it now plans to produce the accounts, which are intended to provide a comprehensive picture of the government’s income, expenditures, assets and liabilities, even earlier in future years.

However, Margaret Hodge, PAC chair, said the latest accounts are ‘not clear’ about how the Treasury plans to meet commitments to achieve some £126bn of consolidation measures by the end of this Parliament. The original suggestion was that this would come from a combination of £100bn in spending cuts and £26bn in increased tax revenues.

Hodge said tax revenues have not been increasing as expected and, although the spending cuts are being delivered, officials are less clear where the savings have been made. She described the challenge of identifying and delivering further expenditure cuts as ‘very testing’ given that in many areas spending is protected.

The PAC was critical of the Treasury’s failure to include more detailed information about the management of the risks and uncertainties in the public sector balance sheet, for instance in the repayment of student debts or the costs of nuclear decommissioning.

It also calls for stronger action to tackle off-payroll arrangements whereby contractors and senior staff are paid through companies as opposed to being hired on the payroll. This is a trend across central government and in the wider public sector, saying that in 27% of cases departments did not insert clauses into contracts allowing them to seek assurances on individuals’ tax obligations.

PAC concludes that ‘long-term fiscal consolidation will not be achieved without better management of the risks and uncertainties in the public sector balance sheet. The Treasury has acknowledged that its spending teams need to better understand the impact of current spending decisions on future generations'.

The committee recommends that the Treasury should collect information across the whole of government in order to produce figures for the total lost through fraud and error, and should develop plans to provide information on national and regional spending within the WGA.

Shah said: ‘With further cuts to the public purse coming in the next parliament, regardless of who is in charge, it is imperative that there is someone at the Cabinet table with responsibility for carrying out a rigorous balance sheet analysis of all income and expenditure. Only then will the next government be in a position to truly fix our public finances and deliver value for money for the taxpayer.’