§ Mr. HobanTo ask the Chancellor of the Exchequer what changes he has made in accounting for(a) taxes and (b) spending since May 1997; and what the impact of these changes has been. [32951]
§ Mr. Andrew SmithThere have been two major changes in accounting practice since 1997 that have impacted on the accounting for taxes and public spending, one in respect of national accounts and one in respect of accounting by Government Departments.
In 1998, the Office for National Statistics (ONS) converted UK national accounts to the European System of Accounts 1995 (ESA95). This changed the accounting for some components of taxes and public spending. The ESA95 treatment was described in "National Accounts Concepts Sources and Methods" (ONS, 1998, ISBN 0–1 1–621062–1), chapters 5 and 21. The impact of the changes on the main public finance aggregates was quantified in the 1998 pre-Budget report (Cm 4076), paragraps B26 to B36.
The Government introduced resource accounting and budgeting (RAB) for Government Departments with effect from 2001–02. This applies generally accepted accounting practices to the accounts and budgets of Government Departments, and replaced the previous system, which just recorded cash flows. The impact of the introduction of RAB on departmental expenditure limits was set out in Spending Review 2000 (Cm 4807), Table A7.