§ Mr. Bensonasked the Secretary to the Treasury whether he is in a position to indicate the views of His Majesty's Government on the recommendations of the Final Report of the Committee on the Form of Government Accounts.
§ Mr. JayYes. His Majesty's Government find themselves in substantial agreement with the views of the Committee on the main questions canvassed in their Report. In particular, they entirely agree with the central conclusion of the Committee that Government accounts as a whole should remain on a cash basis. They regard this verdict by an expert and authoritative body of the standing of the Committee, including as it did eminent members of the accountancy profession, as of great importance.
So far as the detailed conclusions and recommendations of the Committee are concerned, I would ask my hon. Friend to refer to the "Summary of Main Conclusions" listed on pages 57 and 58 of the White Paper, Cmd. 7969. The numbers referred to below are the numbers given in that summary.
The Government agree with the conclusions set out by the Committee in numbers 1 to 5, 7, 10, 13 and 19, all of which deal with different aspects of the cash basis of Government accounting.
Conclusion 6 recommends that trading funds should be established for large and permanent trading operations of Government Departments. The Government regard this as an interesting proposal, and they appreciate its potential advantages. At the same time, the proposal is not free from practical difficulties, and the Government feel that further study is necessary before a final decision can be taken.
Of the other positive proposals put forward in the Report, the Government accept, and propose to put into effect as opportunity offers, numbers 8, 12, 16, 17, 18, 20, 21, 22, 23, 24, 25, 26, and 28. Their acceptance of these proposals is 74W subject to review from time to time in the light of the circumstances, and, in the case of two of them, to the qualifications made immediately below. On conclusion 18, the Government agree that no change should be made in the system of accounting for allied services. As regards telephone and telegraph services, they are not at present convinced that economies would be obtained, by requiring receiving Departments to bear the cost on their own Vote, sufficient to compensate for the additional accounting work involved.
On Conclusion 20 (d) the Government are prepared to accept in principle the recommendation that an appendix to the Estimates for trading services should be published, which will show, on trading account lines, the estimated income and expenditure for the forthcoming financial year. This recommendation has been carried into effect for the year 1951–52 in respect of trading services of the Board of Trade, the Ministry of Food, and the Ministry of Supply; and the Post Office Estimates have also included a forecast of the general account of their commercial accounts in accordance with the recommendations of the Fourth Report of the Select Committee on Estimates, 1950. The procedure must be regarded in the first instance, as experimental, and hon. Members will appreciate that, in present circumstances, any forecast of trading income and expenditure must be more than usually uncertain.
While they appreciate the grounds on which the Committee have put forward their proposals, the Government think that in the case of numbers 9, 11, 27, 29, and 30, the balance of advantage lies against adopting them at the present time.
Of the four remaining recommendations, numbers 14, 15 and 31 are concerned with the compilation and publication of certain additional statistical material. These recommendations have been the subject of thorough and prolonged examination. So far as Conclusions 14 and 15 are concerned, statements, of assets and liabilities in the form proposed present great practical difficulties, and they could only be compiled at very considerable cost in manpower.
Moreover, as the Committee themselves recognise, any such statements would inevitably suffer from serious omissions and difficulties of interpretation. The 75W Government do not feel that in present circumstances the necessary administrative effort can be spared to undertake the considerable additional work which would be involved in attempting to implement these recommendations fully.
Conclusion 31 proposes the publication for financial years, and if possible quarterly, of a consolidated statement of the transactions of the central Government and allied agencies with the rest of the economy, similar to the statement which is already published for calendar years in the White Paper on National Income and Expenditure (Tables 25 and 26, Cmd. 7933).
The Government appreciate that a statement of this kind should facilitate the analysis of the Government's transactions, in general terms, on an "income and expenditure" accounting basis, without necessitating any fundamental alteration in the existing "cash accounting" arrangements, which both the Committee and the Government agree must be maintained as the main basis of Government accounting. They propose, therefore, to consider this question in greater detail. But, in view of the considerable difficulties involved, and the experimental nature of the work, they are satisfied that a further period of more detailed research will be needed before a final decision can be reached.
Finally, so far as Conclusion 32 is concerned, the Government fully agree with the Committee's view that the methods of Government accounting should be kept under constant review, in the light of current developments. They do not necessarily endorse the suggestions about accounting personnel contained in the Report, but they will continue to adopt whatever measures seem desirable to ensure that the efficiency of Government accounting methods is maintained and improved.