Administration and expenditure of the Chancellor's departments, 2008-09 - Treasury Contents

Examination of Witnesses (Questions 540 - 559)



  Q540  Peter Viggers: Have you allowed IFRS to slip because you do not wish to publish the larger debt figures?

  Sarah McCarthy Fry: Absolutely not. It is still a priority that we move towards the IFRS. It is what we set out to do.

  Q541  Peter Viggers: What assessment have you made of the impact on the Government's net debt figure of full compliance?

  Sarah McCarthy Fry: I do not have those figures to hand. I will write to the Committee about that.[11]

  Peter Viggers: It would be helpful to have that estimate. Thank you.

  Q542  Chairman: When will we see finally the Whole of Government Accounts?

  Sarah McCarthy Fry: We have said that the 2009-10 accounts will be prepared on a Whole of Government Accounts basis.

  Q543  Chairman: So we will see them in July; is that right?

  Sarah McCarthy Fry: For 2009-10.

  Q544  Chairman: For 2009-10, so we will see them in July 2010?

  Sarah McCarthy Fry: That is the plan and we are on course to do that.

  Q545  Chairman: So the current year's accounts will be Whole of Government Accounts, is that right? We will see them next July?

  Sarah McCarthy Fry: Yes. We are currently in 2009-10. The NAO, as you know, have reviewed the dry run that we did and there are still some issues outstanding.

  Q546  Chairman: You are going to exclude the part-nationalised banks, is that not right?

  Sarah McCarthy Fry: That is right. They are not going to be consolidated within the Whole of Government Accounts.

  Q547  Chairman: How will that impact on the NAO's opinion?

  Sarah McCarthy Fry: That will be a matter for the NAO.

  Q548  Jim Cousins: I would like to clarify a factual question; I am not trying to bowl some kind of googly here. The Committee has been concerned about what proportion of the assets covered by the Asset Protection Scheme, which now, of course, and in the future will only apply to RBS, represented assets outside the UK. Yesterday I believe a figure of 60% was given for that, that 60% of the assets being protected are outside the UK. I would be grateful if that figure could be properly confirmed. It is obviously of some importance to get the facts right, but I am not expecting an answer right now.

  Sarah McCarthy Fry: We will write to you on that.[12]

  Q549  Ms Keeble: May I ask a final question on the child poverty figures? I understand that the figures that were provided at the time of the 2007 Budget were that 180,000 families were to be gainers in 2009-10 and then 350,000 in 2010-11. Presumably the numbers have slipped a bit because of the month later starting date, but in our brief we have got a figure of 200,000 working families. Where did that come from and what are the accurate figures, particularly given the later starting date?

  Mr Timms: These are the figures relating to the housing benefit change?

  Q550  Ms Keeble: Yes.

  Mr Timms: I am afraid I do not have those in front of me but I would be very happy to take that question away and provide a note.

  Q551  Ms Keeble: Could you, because there are two things? One is clearly how they are going to impact on the 2010 target. If the original figure given was 180,000 and then 350,000 but the scheme starts a month late because it was due to start from the beginning of October and in fact started on 2 November and you have given us a figure of 200,000, there are real discrepancies about what is happening. I am concerned about the lack of rigour in some of the figures around all of this on what is obviously a very important target.

  Mr Timms: The reassurance I can provide is that the data when it is compiled for how many children have been lifted above the poverty line will be very rigorous, but I take your point that this change could be one of the influences on that outcome.

  Q552  Ms Keeble: It was the only one that was left out of the three announced in the 2007 Budget. We have seen all the others come through. This is the only one which is going to start getting things heading in the right direction.

  Mr Timms: But those other measures have not yet been reflected in the figures. As I said earlier, the latest figure we have is half a million children lifted above the poverty line. Measures we have taken since that measurement was made we believe will lift an additional half million above the line.

  Q553  Ms Keeble: This was the biggest one.

  Mr Timms: That clearly could have an impact and I will come back to the Committee with a note on that.[13]

  Q554  Chairman: Just a final question from me. Last year we expressed concern that the Treasury itself had underspent on its spending limit for the sixth consecutive year. Now we find you have underspent for the seventh consecutive year by £22 million or 10% of your budget. What do you intend to do with the end-year flexibility you have accumulated with this repeated underspending?

  Sarah McCarthy Fry: Obviously, we will look at it in the light of the requirements that we have coming forward. We try and manage our estimates the best we can and we always put in the resource accounts the reasons for the underspend, and I think it varies from year to year.

  Q555  Chairman: But it always varies the same way is what concerns this Committee. You are persistently underspending and the Permanent Secretary told us that he was frustrated by that, so what are you doing about it?

  Sarah McCarthy Fry: As I say, we do try and match our estimates to our resources as best we can. This year it was caused by a higher than expected income. Last year it was caused by lower than expected costs, so we are doing our best to try and manage it. Obviously, it is in everyone's interests if it is more accurate.

  Q556  Chairman: Have you changed end of year flexibility policy for the other government departments?

  Sarah McCarthy Fry: Not to my knowledge, no.

  Q557  Chairman: Because the NAO reported that several of the other departments had rather lost confidence in the system. They were not clear about end-year flexibility.

  Sarah McCarthy Fry: If they are not clear then I am sure we will make it clear to them. If that is the reporting I was not aware of that. Could I just clarify on the Whole of Government Accounts that it was quite right to say that the nationalised banks are not consolidated. However, our investment is accounted for in our own Treasury Resource Accounts which obviously then form part of the Whole of Government Accounts. It is just that they will not be consolidated in there.

  Q558  Chairman: So they will appear in the Whole of Government Accounts?

  Sarah McCarthy Fry: But not consolidated into them.

  Q559  Chairman: Is that not the point of Whole of Government Accounts? Is not consolidation the whole point?

  Sarah McCarthy Fry: Yes, but the point we make is that we do not consider the nationalised banks to be appropriate to be consolidated into the Whole of Government Accounts.

11   Ev 112 Back

12   Ev 113 Back

13   Ev 106 Back

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