HC Deb 22 January 1990 vol 165 c538W
Mr. Ralph Howell

To ask the Chancellor of the Exchequer pursuant to his reply to the hon. Member for Norfolk, North on 9 January,Official Report, column 576, which specific sectors of the public sector in which normal accountancy and auditing methods (a) are already employed, (b) are being developed and (e) are considered to be inappropriate.

Mr. Ryder

The position in different parts of the public sector is as follows:

(a) Government Departments Some Departments already produce commercial-style accounts. These include the existing trading funds (The Royal Mint, Her Majesty's Stationery Office and The Crown Suppliers) and some other Departments with major trading functions, for example, Ordnance Survey, ECGD and the Forestry Commission. The Government's White Paper "The Financing and Accountability of Next Steps Agencies" sets out plans for the future. The arrangements proposed for agencies which become trading funds are described in paragraphs 5.9 to 5.13. The arrangements proposed for those which remain under full Vote accounting are described in paragraphs 5.14 to 5.17. Normally only cash-based appropriation accounts will be published for Departments or parts of Departments which do not become next steps agencies.

(b) Non-departmental public bodies (NDPBS) NDPBs are bodies which have a role in the process of national Government-but which are not Government Departments. Many NDPBs which are classified as executive bodies already produce commercial-style accounts on an accruals basis. The expenses of NDPBs which arc classified as advisory and judicial bodies are generally brought to account in the cash-based appropriation accounts of their sponsoring Department.

(c) National Health Service In the National Health Service accounting has been developed along more commercial lines over recent years, with the exception of accounting for capital. It is intended to implement capital accounting, including the preparation of balance sheets for the financial year 1991-92. It is planned that the Audit Commission should take over the audit of the NHS under the provisions proposed in the NHS and Community Care Bill, and the Local Government and Housing Bill.

(d) Local Authorities In February 1989 the local authority associations and CIPFA published "Capital Accounting in Local Authorities", containing proposals to change the way local authorities account for capital receipts and expenditure, and to secure improvements in local authority accounting. These proposals could form the basis of a code of practice for local authority capital accounting which would apply to all authorities from 1991-92. The proposals would move local authority accounting closer to commercial accounting principles. But they reflect legal constraints: for example, those applying to grants and rates, which do not apply to the private sector.

(e) Nationalised Industries Nationalised industries produce accounts on a commercial basis.