Government Resources and Accounts Bill — Independent body — 29 Feb 2000

As amended in the Standing Committee, considered .

(2) For the purpose of subsection (1)--

(a) outstanding expenditure in respect of the acquisition of assets, securities and rights shall be taken to be the aggregate of amounts paid for the acquisition of assets, securities and rights which have not been disposed of,

(b) outstanding expenditure in respect of a loan shall be taken to be the amount outstanding in respect of the principal,

(c) outstanding expenditure in respect of a guarantee shall be taken to be the aggregate of amounts which have been paid in fulfilment of it and in respect of which the Treasury has not been reimbursed, and

(d) the Treasury shall make arrangements for evaluating outstanding expenditure in respect of anything done under section 16(1)(b) or (c) which is not addressed by paragraphs (a) to (c) above.

(3) The Treasury may by order substitute a new amount for the amount for the time being specified in subsection (1).

(4) An order under subsection (3)--

(a) shall be made by statutory instrument, and

(b) shall not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.'.-- [Miss Melanie Johnson.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

Madam Speaker:

With this it will be convenient to discuss the following: Amendment No. 8, in clause 16, page 8, line 44, after "on", insert "upstream".

arrangements for evaluating outstanding expenditure in respect of anything done under section 16(1)(b) or (c).

The Treasury may incur expenditure in respect of the establishment of a body for the purpose of carrying on public-private partnership business?

The accounts of a body to which financial assistance is provided under subsection (1)(b) or (3) shall be open to inspection of the Comptroller and Auditor General and that body shall give such explanations of those accounts as he may reasonably require.

get more PFI deals done better and quickly.

in designing the capital structure we won't allow PUK to be taken hostage by anyone on the private sector side of the fence in order to gain unfair preference.

the one thing that is not understood is that PUK will have a single client--the public sector.

If PUK does a single deal, which the public sector regards as gouging, or exploiting a conflict of interest, it is dead. No one would ever deal with it again

Its goodwill is single source and precarious.

it is not enough to rely on the underlying understanding. We will have to have rules in place

There are no plans for a state investment bank.--[ Official Report , 16 July 1999; Vol. 335, c. 367W.]

Financial assistance . . . may be provided on terms and conditions. . .

may incur expenditure for the purposes of investing in the body . . . and may provide loans and guarantees and make other kinds of financial provision.

may incur expenditure in respect of the establishment of a body,

may incur expenditure for the purposes of investing

in the body, or

may provide loans and guarantees.

the establishment of a body.

The National Asset Register covers all central Government departments together with their executive agencies (including trading funds).

Firstly, you asked about the procedure for reporting guarantees and whether any guarantees given to PUK will appear in Government accounts or in a note to them. I can assure you that Parliamentary reporting arrangements in respect of contingent liabilities--which includes those arising from guarantees--will not change under the GRA Bill.

As I said in Committee, there is no intention to hide guarantees. The arrangements for reporting guarantees are set out in section 26.3.13 of--

are set out in section 26.3.13 of Government Accounting,

that a statement would be laid before both Houses of Parliament in the event that a guarantee were given. Such a statement would indicate that the liability would be charged to the Consolidated Fund. Any guarantee provided would appear, like other contingent liabilities, in the Supplementary Statements to the Consolidated Fund and National Loans Fund Accounts.

separate disclosure of information about a particular contingency need not be made if that information has a protective marking.

Partnerships UK will not operate as a bank. It must retain the flexibility to generate new business.--[ Official Report, Standing Committee A , 20 January 2000; c. 266.]

said that the figure should be taken seriously. A maximum of £500 million should be more than sufficient to finance whatever substantial portfolio of start-up feasibility studies may be necessary in the public and local authority sectors.

We agreed with him, but we thought that £500 million was a little too much and that we should look at a lower figure. We have come up with £400 million, which I believe is the right ballpark figure because it provides maximum benefit at minimum cost. It will still allow the new company some flexibility.

£500 million should be more than sufficient to finance whatever substantial portfolio of start-up feasibility studies may be necessary . . .

It will be useful to draw attention to the potentially unlimited expenditure in which the new body could engage.--[ Official Report, Standing Committee A , 20 January 2000; c. 256.]

Question put and agreed to.

Clause read a Second time, and added to the Bill.

(2) The Independent Body shall be either--

(a) an existing body serving the accounting profession in the UK; or

(b) an existing international body serving the accountancy profession; or

(c) a new body, established for the purpose, whose members are appointed solely upon the basis of their expertise in

accounting practices and who are not subject to dismissal by the Treasury or by any Minister.'.-- [Mr. Letwin.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker:

With this, it will be convenient to discuss the following amendments: No. 1, in clause 5, page 2, line 41, leave out "the Treasury" and insert "the Independent Body".

I am promising to continue to think about the matter. . .--[ Official Report, Standing Committee A , 11 January 2000; c. 65.]

Resource accounts shall be prepared in accordance with directions issued by the Treasury.

do not believe that a separate standard-setting body is needed, not least if it implies a body that will be in competition with the Accounting Standards Board. The Government are content to follow the standards issued or approved by the ASB, which already apply to all private and many public sector bodies.--[ Official Report, Standing Committee A , 11 January 2000; c. 60.]

A government department for which an estimate is approved by the House of Commons in respect of a financial year shall prepare accounts (to be known as resource accounts) for that year detailing . . . resources acquired, held or disposed of by the department during the year, and . . . the use by the department of resources during that year.

Resource accounts shall be prepared in accordance with directions issued by the Treasury.

shall be prepared in accordance with directions issued by the Treasury.

which shall have the functions assigned to it in this Act,

The Treasury shall send accounts . . . to the Comptroller and Auditor General.

The Comptroller and Auditor General shall examine accounts sent to him under this section with a view to satisfying himself that they present a true and fair view.

Resource accounts shall be prepared in accordance with directions issued by the Treasury.

The Treasury shall exercise the power to issue directions under subsection (2) with a view to ensuring that resource accounts conform to generally accepted accounting practice subject to such adaptations as are necessary in the context of departmental accounts.

The accounts shall contain such information in such form as the Treasury thinks fit, and be designed to conform to generally accepted accounting practice--

accounts shall contain such information in such form as the Treasury thinks fit, and be designed to conform to generally accepted accounting practice subject to such adaptations as are necessary in the context,

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),

That, at this day's sitting, the Government Resources and Accounts Bill may be proceeded with, though opposed, until any hour.-- [Mr. McNulty.]

Question agreed to.

As amended in the Standing Committee, again considered.

Question again proposed, That the clause be read a Second time.

A further safeguard . . . would be to create a small independent fiscal policy committee with a few full-time staff. Answerable to the Public Accounts Committee,--

. . . its primary role would be to police the definitions--

in the public accounts (including 'capital accounts'),

I should not imagine that it would.--[ Official Report , 6 December 1999; Vol. 340, c. 650.]

Initial estimates, based on dry run resource accounts for 1998/99, suggest an upward revision of the estimated capital stock of central government at end-1998 of around £6 billion. However, this is offset by downward revisions to the figures for local authorities and public corporations based on evidence from other sources. Overall the public sector depreciation charge for 1998 might be revised up by around £¾ billion.

an existing body serving the accounting profession in the UK.

an existing international body serving the accountancy profession. . .

a new body, established for that purpose,

Question put, That the clause be read a Second time:--

The House divided: Ayes 152, Noes 311.

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