Wednesday, 11 June 2014

Whitehall savings – too modest by half

The Treasury and the Cabinet Office issued a joint press release yesterday, Government unveils £14.3 billion of savings for 2013 to 2014.

It comprises a mass of figures all of which need to be audited by the NAO before anyone can know how reliable they are. As it happens, the NAO published their Report of the Comptroller and Auditor General: Whole of Government Accounts 2012-13 on the same day. They've had to qualify the Whole of Government Accounts (WGA) for 2012-13. They do not present a true and fair view:
... the Comptroller & Auditor General, Amyas Morse, has again qualified the WGA because of significant continuing issues with the quality and consistency of the data included; and has again expressed concern that bodies such as Network Rail and FE institutions continue to be excluded, even though accounting standards require their inclusion.
The ONS also may care to comment on the Treasury/Cabinet Office methodology:
The Efficiency and Reform Group has supported departments in saving £14.3 billion against a 2009 to 2010 baseline.
It's easy to show savings against a year in which there was an obvious crisis. But suppose the baseline chosen was the healthier year 1996-97?

The Treasury's Statistical bulletin: public spending statistics February 2014 shows that government total managed expenditure in real terms was £449.1 billion in 1996-97 and £673.7 billion in 2012-13 (p.19), a 50% increase. As a percentage of GDP, it has gone up from 39.0% to 42.8% in the same period (p.20). That's not a saving, but you wouldn't know it from the press release.

The ONS's Government Deficit and Debt Return, March 2014 shows that the national debt was £1.046 trillion in 2009-10 and had risen 32.5% three years later to £1.387 trillion in 2012-13 (table M1) – the Treasury/Cabinet Office press release studiously ignores the context of their modest savings, which go hand in hand with a weekly interest bill alone of £1 billion.

For DMossEsq readers there is a specific omission from this press release which demands explanation.

Back in January, Francis "JFDI" Maude gave an interview to the Huffington Post during which he said that:
Noting the success of the gov.uk site, a portal that brings the government billions in revenue from countries such as New Zealand that have paid for the source code, Maude said ...
You'd think the Treasury and the Cabinet Office would find room to mention this useful addition to funds. Mr Maude is not usually so modest, nor Mr Osborne.

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