The government’s accounts are ‘impenetrable, too slowly produced and incomplete’

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A couple of days ago I criticised an extract from the Whole of Government Accounts that had been published by the National Audit Office, I felt incomprehensibly.

I now have the permission of Nick Bateson of the NAO to publish the response he sent to me, and I am pleased to do so.

Dear Mr Murphy,

I am the NAO Director with overall responsibility for our work on the Whole of Government Accounts, and I noted today that you issued a post on your website ( about our page - Snapshot of UK Finances.

I wanted to provide some more background and context on this page, and describe what we are trying to achieve with it, as I was disappointed to read that you thought it was unhelpful.

The information in the Snapshot is not produced by us, but is from the Treasury’s Whole of Government Accounts (WGA) (, which we audit. The introduction to the WGA, which covers 6,000 bodies that form the entire public sector, sets out at a high level the messages and trends within the data from the Treasury’s perspective and provides a useful insight into the government’s overall finances.

However, the accounts are complex, impenetrable for the public, produced too slowly and incomplete. We describe these issues in our report at the conclusion of our audit of the WGA, which can be found at This report includes an introduction to the WGA; details of the audit opinion the Comptroller and Auditor General is able to provide on the accounts; and recommendations for the Treasury to improve the WGA’s usefulness and relevance.

Our aim in producing the Snapshot page ( is to place the raw WGA data into the public domain, in a format that can be manipulated. The page is not designed to convey a particular message, but to provide the ability for interested parties to access the rich underlying data that forms the WGA and is not available anywhere else. We hope that this will act as a resource for those who may wish to interact with the complexities of the public finances from an accounting perspective.

I am very happy to meet with you to discuss the WGA; its uses; and the reasons why we think it is important if it would be helpful. The Committee of Public Accounts is planning to hold a hearing on the WGA, supported by some additional material we are producing to illustrate some of the most significant numbers in the accounts (pensions, assets and financial risks) in July.

I released a blog last week that places the WGA in context with the other main elements of the government’s financial framework, which you may find interesting. This can be found at

Kind regards,

Nick Bateson

Nick Bateson | Director Whole of Government Accounts
National Audit Office, 157-197 Buckingham Palace Road, Victoria, London, SW1W 9SP

I will take up the offer to meet when I have finished writing my latest book (about half done now).

In the title of this blog I highlight the key issue I picked out of this letter, but the most important issue by far in my opinion  is that the accounting base used for these accounts - which is IFRS - is simply unfit for this purpose.

The purpose of IFRS financial statements is supposed to be the provision of useful information to the providers of capital to an enterprise but this makes no sense at all in the case of the government.  Most people do not engage with the government on the basis IFRS assumes and even suppliers of capital to it do so knowing it can always repay because it has, unlike any other entity they will deal with, the capacity to print any amount of money to meet its obligations.

In that case the accounts are flawed from the outset because they are designed to supply information no user is asking for or needs.

That's a pretty big problem.