PILOT EXERCISE FOR MERGED SPRING DEPARTMENTAL REPORTS AND RESOURCE ACCOUNTS—HM TREASURY PARTICIPATION

  In an effort to examine the scope for improved annual reporting and as part of the Government's commitment to reducing the reporting burdens placed on departments, the Treasury is proposing that Departmental (spring) Reports and Departmental Resource Accounts be merged for 2007 to form one document—a Departmental Annual Report and Accounts.

  In principle, a combined report has the potential to provide a better product for Parliament and the public: it would bring financial data and explanatory text together in a single, authoritative document.

  The Chief Secretary wrote to the Liaison Committee on 9 November 2006 setting out our proposal to run a pilot scheme this year with a limited number of departments. The Liaison Committee expressed conditional support in January, and Treasury would like to take part with its own combined report for 2007.

BACKGROUND

  Departments are currently required to publish a spring Departmental report that reports to Parliament on the organisation of the Department, their aims and objectives and performance against those objectives, and the nature of their expenditure. These spring reports are typically published in early May.

  In addition, Departments publish Resource Accounts. These Accounts present the operating costs and financial position of the Department, and are audited by the National Audit Office. Under the Faster Closing initiative, departments should lay their resource accounts before the Summer Recess.

  Both the spring Departmental Reports and the Resource Accounts contain performance, management and financial information that looks back at past years and forward to plans. Not all the information is the same, but a large part, such as information on corporate governance, is duplicated. Merging the two documents will remove that duplication. The Treasury also believes that it has the potential to aid parliamentary scrutiny by having financial data and explanatory text in one place.

STRUCTURE OF THE 2007 HM TREASURY ANNUAL REPORT AND ACCOUNTS (ARA)

  Our aim is to combine the reports as deeply as possible, reducing the duplication that currently exists and providing an improved Treasury Group focus (embedding the work and contribution of the three parts of the Treasury Group—HM Treasury (or Core Treasury), the Debt Management Office (DMO) and the Office of Government Commerce (OGC)) into the main text in the body of the report. A consequence of this will be that there will no longer be a separate chapter for the OGC and DMO. We will, however, ensure that OGC and DMO information will be clearly attributed in the text of the body of the report.

PUBLICATION TIMETABLE

  Departmental Reports are usually published in mid May, with the Resource Accounts following in June/July before the Summer Recess. We have consulted the NAO about faster closing of the Resource Accounts this year and we would propose publication of the new combined report by mid June at the latest. We will of course keep you informed of any potential slippage.

  My officials have made contact recently with the Scrutiny Unit. We will keep the Unit informed regarding progress on the development of the ARA.

FOLLOW-UP

  We are conscious of the value Select Committees place on the spring Departmental Reports as part of their scrutiny of departments performance and wish to work closely with the Committee in evaluating the worth and workability of the pilot scheme. We would also be keen to continue official-level contact on the report on a regular basis gong forward.

  Once the pilot is completed, it would be helpful if, the committee were to provide feedback to the department. This will also help to determine whether the pilot scheme should be widened in future years.

  In addition to producing a single report combining financial data and underperformance and strategic information, this pilot scheme gives us an opportunity to reduce the reporting burdens placed on departments, reduce duplication in documents scrutinised by Parliament and test progress on the commitment for faster closing of accounts. The Treasury would welcome the active involvement of the Treasury Parliamentary Committee and the sub committee.

19 April 2007