Post on 23-Dec-2015
Clear line of sight: Aligning budgets, Estimates
and accountsKen Beeton & Doug Rayner OECD Public Sector Accruals Symposium – 3 March 2008
2
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
3
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
4
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
5
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
6
Resource Accounts
BudgetsEstimates
The problem we are trying to solve – Budgets, Estimates & Accounts
34618435
-5
0.2
Less than 0.1 -0.1
Amounts included under each system (£ billion)
7
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
8
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.”
9
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
10
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
11
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