Operational change needed to cut costs, says NAO
Analysis of central government department accounts identifies that whilst effective action was taken in 2010-11 to reduce spending, better understanding of costs is imperative to meet further cuts by 2014-15.
In ‘Cost Reduction in Central Government: Summary of Progress: Cabinet Office and HM Treasury’ (HC 1788) the National Audit Office warns that long-term changes are required by Cabinet Office and HM Treasury to achieve a further 19% of cutbacks as required by the spending review.
Budget targets add more pressure to health service
'Public Expenditure’ (HC 1499) examines the progress of the health and care services in the face of increasing demands to their budgets.
The report details that hospitals are resorting to short-term "salami slicing" as they try to find £20 billion in efficiency savings by 2014-15.
Financial Conduct Authority considers future Bill
‘Financial Conduct Authority’ (HC 1574) announces a number of recommendations for Government consideration ahead of the drafting and publication of the Financial Services Bill due in early 2012.
A new regulatory framework proposes that the Financial Conduct Authority (FCA) are assigned with protecting and enhancing confidence in financial services and markets, as well as protecting consumers by promoting competition.
Osborne presents Autumn Statement 2011
With the objective to stabilise the UK economy, Chancellor of the Exchequer George Osborne announced to Parliament the Government’s revised plans in the ‘Autumn Statement 2011’ (Cm. 8231).
Actions outlined in the document cover three target areas: protecting the economy; building a stronger economy for the future; and fairness.
Decline in economic growth expectations until 2017
The Office for Budget Responsibility (OBR) has lowered its expectations up until 2017 as the UK economy has strengthened at a slower rate than anticipated this year.
In the report 'Economic and Fiscal Outlook: November 2011’ (Cm. 8218) the OBR forecasts less probability of growth for the period to 2016-17 impacted by inflation and the eurozone crisis.
500 projects planned to strengthen UK infrastructure
After conducting comprehensive cross-sectoral analysis of the UK’s infrastructure networks, the Government plans to implement over 500 projects to ensure it is maintained and improved over time.
The Treasury and Infrastructure UK sets out the three-tiered strategy for meeting the infrastructure needs of the UK economy in the ‘National Infrastructure Plan 2011’:
Governance at the Bank of England must be strengthened
'Accountability of the Bank of England' (HC 874) details the Treasury Committee's opinion that governance at the Bank of England must be strengthened to reflect its new powers.
The Committee believes that the Court of the Bank of England should be transformed into a smaller, more expert Supervisory Board with its own staff and discreet aims.
Commission sets out plans for stable UK banking
The Independent Commission on Banking (ICB) published its ‘Final Report’ detailing how they intend to create a sustainable UK banking system that is stable and competitive.
Implementation of these reform plans will happen by 2019, intended to result in better-capitalised, less leveraged banking more focused on the needs of savers and borrowers in the domestic economy.
Committee apprehensive about public-private projects
The Committee of Public Accounts voices concerns about the continuing financial cost of private finance initiatives (PFI) for public organisations in the report 'Lessons from PFI and Other Projects’ (HC 1201).
The Committee believes that some of the Government's cases for using PFI has not been based on robust analysis, but on ill-founded comparisons and invalid assumptions.
Taxpayers will foot Private Finance Initiative bill
MPs conclude that the Private Finance Initiative (PFI) provides taxpayers with poor financial security and policy reform is required to control what investments government departments make.
In the report 'Private Finance Initiative’ (HC 1146), the Treasury Committee found that the Private Finance Initiative (PFI) does not provide good value for money for taxpayers and stricter criteria should be introduced to govern its use.
Cheques retained for the foreseeable future
On 12 July 2011, the Payments Council announced that cheques will continue for as long as customers need them and that the target for possible closure of the cheque clearing in 2018 had been cancelled.
In the report 'The Future of Cheques’ (HC 1147) the Treasury Committee believes that the industry-dominated Payments Council should no longer have the unfettered power to decide the future of cheques, or other payment methods that directly affect millions of people.
Plans for financial system reform outlined
In 'A New Approach to Financial Regulation: The Blueprint for Reform’ (Cm. 8083), the Government outlines ambitious plans to reform UK financial regulation through the creation of specialist regulatory bodies.
Following on from consultation in February and with continuing policy development by the Treasury, the Bank of England and Financial Services Authority, the Government intends to promote the role of judgement and expertise with new regulators.
National Audit Office assesses value of private finance projects
The National Audit Office (NAO) has considered outcomes of Private Finance Initiative (PFI) projects to assess their overall success and whether PFI is value for money for the Government.
In ‘Lessons from PFI and Other Projects’ (HC 920) the NAO draws on five major PFI reports examined in 2010 which considered 162 projects between them with a capital value of £18 billion.
Independent Commission on Banking releases interim report
The Independent Commission on Banking (ICB) aims to improve the stability and competition in UK banking as outlined in its ‘Interim Report’.
The report sets out the ICB's current and provisional views on possible reforms for UK banking and seeks responses to those views.
Committee reviews Budget measures and its forecasters
The Treasury Committee comments on plans outlined in the Budget 2011 ahead of the Second Reading of the Finance Bill and calls for a full review of the independent Budget forecast group.
The report 'Budget 2011’ (HC 897) looks at the way the Office for Budget Responsibility (OBR) functioned in preparation for the first Budget since it was permanently established and stresses the need to assess the appropriateness of its operating model.
Budget for 2011 promotes growth and fairness
The ‘Budget 2011’ (HC 836) comprises of goals to encourage sustainable growth and deliver fairness by rebalancing the economy.
The document focuses on plans to reform the tax, benefit and pensions system to become the most competitive in G20 with positive effects evenly shared across the country.
Predictions made for UK economy over next five years
The report 'Economic and Fiscal Outlook: March 2011' (Cm. 8036) sets out forecasts for the period to 2015-16 and assesses whether the Government is on course to meet medium-term fiscal objectives.
The organisation that compiled the report, the Office for Budget Responsibility (OBR), was established to provide independent and authoritative analysis of the UK's public finances.
European Union funds require successful management with fluctuating exchange rates
With the risk of a decline in the euro, the National Audit Office (NAO) believes that more could be done to manage European Union (EU) funds supplied to the UK.
'Managing the Impact of Changes in the Value of the Euro on EU Funds’ (HC 759) highlights that while the EU’s funds to the UK are denominated in euros, UK departments must supply recipients with payment in pounds. If the exchange rate alters and the euro decreases in value, this could cause loss for departments in situations where a figure has already been agreed in pounds before payment from the EU.
Predictions made for UK economy over next five years
The report 'Economic and Fiscal Outlook: March 2011' (Cm. 8036) sets out forecasts for the period to 2015-16 and assesses whether the Government is on course to meet medium-term fiscal objectives.
The organisation that compiled the report, the Office for Budget Responsibility (OBR), was established to provide independent and authoritative analysis of the UK's public finances.
Major departmental savings revealed in Spending Review 2010
Chancellor George Osborne announced £81 billion worth of savings to be implemented by 2014-15 in the Coalition Government’s first ‘Spending Review 2010 (Cm. 7942)’.
Inheriting one of the most challenging current fiscal positions in the world, the government strives to reduce the nation’s largest deficit in its peacetime history.
Committee encourages Budget forecasters to establish independence
In order for the external interim group responsible for forecasting the budget to succeed, they need to take significant steps to be perceived as independent.
The Office for Budget Responsibility (OBR) formed in May 2010 and is led by the Budget Responsibility Committee (BRC) having been sourced by the Chancellor of the Exchequer. The Office assessed the Government’s fiscal policy prior to and at the time of the June 2010 Budget, therefore holding crucial responsibility in the judgement of the UK’s economy.
UK Government forms Committee for financial stability
The Government intends to take control of the UK’s current financial crisis by creating a new regulative committee.
The document ‘A New Approach to Financial Regulation: Judgement, Focus and Stability’ (Cm. 7874) outlines the new Financial Policy Committee’s (FPC) responsibility to manage the UK’s fiscal deficit and encourage stability in the system with macro-prudential tools.
Value for Money savings programme forecast scrutinised
‘Progress with VFM Savings and Lessons for Cost Reduction Programmes: HM Treasury’ (HC 291) reports that the forecast made by government departments to save £35 billion between 2008-09 and 2010-11 is not viable.
The National Audit Office (NAO) concludes that HM Treasury's design addressed some weaknesses in earlier savings programmes, and departments have made some progress in their management of their programmes compared with previous spending periods.
Chancellor reveals new budget under coalition Government
‘June Budget 2010’ (HC 61) is the renewed fiscal document detailing urgent changes to axe the country’s deficit under the coalition government.
For the first time, the Government's monetary policy decisions have been based on independent forecasts for the economy and public finances. Urgent action will be taken to eliminate the bulk of the structural deficit through plans for additional consolidation of £40 billion per year.
Report examines independent Budget forecasts
Following the formation of the new coalition Government in May 2010, 'Examination of the Forecasts Prepared by the Interim Office for Budget Responsibility for the Emergency Budget 2010' (HC 142) reports on the Chancellor's launch of the interim Office for Budget Responsibility (OBR) to make independent assessments of the public finances and the economy.
To reflect the interim arrangements, the Comptroller and Auditor General was requested to undertake an examination to consider whether key economic and fiscal assumptions underpinning the Office for Budget Responsibility's forecasts were independently arrived at.
Payment to The Queen’s Civil List unchanged by Royal Trustees
In line with the Budget announced on 22 June 2010, the Chancellor revealed that payment to the Queen’s Civil List will remain at £7.9 million for the next calendar year.
In 'The Civil List Act 1972: Report of the Royal Trustees' (HC 140), the Royal Trustees recommend that expenditure in 2011 should be basically the same as in 2010, except that the one-off pension scheme deficit contribution in 2010 will not continue.
Government announces 2010 Budget
'Budget 2010: Securing the Recovery’ (HC 451) is fiscally neutral and confirms the Government's plans to more than halve the deficit over four years. It identifies £11 billion of cross-cutting savings announced under Smarter Government and details £5 billion savings from targeting and prioritising spending.
On tax the Government intends to progress tax consolidation plans and announces the continuation of above inflation increases in fuel, alcohol and tobacco duties to 2014-15. Overall spending will continue to rise in 2010-11 to help support the economy through the recovery, but expenditure will grow at the slower rate of 0.8% a year on average from 2011-12 to 2014-15.
Government announces the 2009 Pre-Budget Report
The 'Pre-Budget Report 2009 - Securing the Recovery: Growth and Opportunity’ (Cm. 7747) presents updated assessments and forecasts of the economy and public finances. It also reports on how, in the face of the downturn, the Government is delivering support to the economy, businesses and households to secure the recovery and provide a platform for growth and opportunity.
Public support provided to UK banks by the Treasury was justified
In the report ‘Maintaining Financial Stability Across the United Kingdom's Banking System (HC 91)’ the National Audit Office has concluded that the public support provided to UK banks by the Treasury was justified, given the scale of the economic and social costs if one or more major banks had collapsed. In providing that support, moreover, the Treasury met two of the Government's principal objectives: protecting depositors' money in banks and maintaining the stability of the financial system. The final cost to the taxpayer will not, however, be known for a number of years.
Concern over European financial regulation reforms
In September 2009 the European Commission published its detailed legislative proposals for European reform. 'The Committee's Opinion on Proposals for European Financial Supervision (HC 1088)' reports on this proposed financial regulation and outlines a number of concerns.
Government announces financial markets reform
This document, 'Reforming Financial Markets (Cm. 7667)', sets out the Government's analysis of the causes of the financial crisis, the action already taken to restore financial stability and the regulatory reforms necessary to strengthen the financial system for the future, so that consumers, businesses of all sectors and the economy as a whole continue to have access to the stable credit that is so essential.
Further measures to protect depositors
The past year has seen a period of sustained turbulence and instability in global financial markets, with financial firms across the world affected. In Britain, the Northern Rock bank experienced a run on its deposits and, in February 2008, the bank was nationalised. A January 2008 consultation paper summarised the actions being taken by the Treasury, the Financial Services Authority (FSA) and the Bank of England in response to the disruption being experienced in the global financial markets.
This publication, 'Financial Stability and Depositor Protection: Further Consultation' (Cm. 7436), presents a further consultation paper on financial stability and depositor protection in the UK, following on from the January 2008 paper.
Forecasts and measures of 2008 Budget examined
This Report, 'The 2008 Budget' (HC 420), examines the forecasts and measures contained in the 2008 Budget.
The Treasury's lower forecasts for economic growth in 2008 and 2009 are above the average of independent forecasters, suggesting that the Treasury may have given insufficient weight to the risks of continued financial market turbulence. It also suggests that some of the UK economy's characteristics that have been beneficial in past crises might prove to be channels through which the current problems in global financial markets are transmitted to the UK real economy.
Annual Finance Bill presented to Parliament
The 'Finance Bill' is the annual bill presented by the Government in order to implement the measures contained in the Budget report.
This Bill seeks to implement the measures set out by Alistair Darling in the 2008 Budget Report, 'Budget 2008 - Stability and Opportunity: Building a Strong, Sustainable Future' (HC 388).
Stability is the aim of Budget 2008
'Budget 2008 - Stability and Opportunity: Building a
Strong, Sustainable Future' (HC 388) sets out the Government's plans for
taxation, public spending and economic growth for the coming year.
The
Government reports that the economy is stable and resilient, continuing to
grow, and that its strict fiscal rules are being met.
Treasury response to Stern Review not made with scale or urgency required
Environmental taxes, as a proportion of all taxation, peaked at 9.7% in 1999 and have declined ever since, falling to 7.3% in 2006.
In this report, 'The 2007 Pre-Budget Report and Comprehensive Spending Review: An Environmental Analysis (HC 149-I)', the Environmental Audit Committee sets out a number of conclusions and recommendations covering different areas of environmental taxation policy.
Global financial instability examined
The period since early August 2007 has been one of large-scale turbulence and instability in global financial markets. The unfolding crisis of confidence is important given the particular impact on the United Kingdom through the run on the Northern Rock Bank.
'Financial Stability and Transparency (HC 371)' examines the causes of the dislocation of international financial markets, subsequent developments in global financial markets and lessons learnt, as well as the prospects for international action and other developments to promote financial stability and transparency.
Banking (Special Provisions) Act given Royal
Assent
'Banking (Special Provisions) Act
2008' addresses recent instability in financial markets across the world,
and in particular the events concerning Northern Rock plc.
UK financial reform discussed
‘Financial Stability and Depositor Protection: Strengthening the Framework’ (Cm. 7308) examines possible reforms of the existing financial supervisory regime.
Work of UK Economic Regulators examined
'UK Economic Regulators’ (HL
189-I) examines the statutory remits of the UK economic regulators, their
working methods and working relationships, the value for money they provide and
the extent to which the regulators have successfully promoted competition and
de-regulated where possible, as well as considering whether they should be
given an additional statutory duty to facilitate the competitiveness of UK
firms.
Pre-Budget Report 2007: Meeting the aspirations of
the British people?
'Meeting
the Aspirations of the British People: 2007 Pre-Budget Report and Comprehensive
Spending Review’ (Cm 7227), presents updated assessments and forecasts of
the economy and public finances, describes reforms that the Government is
making, and sets out the Government's priorities and spending plans upto
2010-11.
Business rate supplements proposed
‘Business
Rate Supplements: A White Paper’ (Cm. 7230) sets out the Government's
proposal to introduce a power for local authorities and the Greater London
Authority (GLA) to raise and retain local supplements on the national business
rate.
Shareholder Executive reviewed
The Shareholder Executive was established in 2003 to act as
an effective owner of businesses that are owned or part owned by government. It
is now an operational group within the Department of Trade and Industry with a
portfolio covering 27 businesses and a combined turnover of £21 billion.
This Report
'The
Shareholder Executive and Public Sector Businesses’ (HC 409) examines the
status and performance of the agency.
Private equity industry examined
The private equity industry is of growing importance; 8% of
the UK workforce is now employed in private equity owned companies and there
are a rising number of take-overs of large companies.
'Private
Equity: Volume II' (HC 567-II) presents evidence given to the Treasury
Select Committee’s inquiry into the private equity industry.
Finance Bill 2007 reviewed
This Report from the House of Lords
'The
Finance Bill 2007' (HL 121-I) examines the Finance Bill, which implements
measures from
'Budget
2007' (HC 342).
Private Finance Initiative experience examined
Government projects funded through Private Finance
Initiative (PFI) deals are generally financed through a mixture of debt finance
and equity finance. Long-term projects may be refinanced during the life of the
project.
The Committee of Public Accounts's Report
'Update
on PFI Debt Refinancing and the PFI Equity Market' (HC 158) examines the
PFI debt refinancing experience, the operation of the PFI equity market and the
availability of financial information about PFI projects.
Brown’s 11th Budget: Prosperity for Families
The Budget sets out the Government's plans for taxation,
public spending and economic growth for the coming year.
Two new Council Tax bands proposed
The
'Lyons
Inquiry into Local Government' examines the function of local government
and considers the case for changes to the present system of local government
funding in England.
Investing in Britain’s potential: Pre-Budget Report
2006
‘Investing in Britain’s potential: Building our long-term
future’ is the Treasury’s 2006 Pre-Budget Report.
The Report presents
updated assessments and forecasts of the economy and public finances, describes
how the Government's policies are helping to deliver its long-term goals and
details reforms the Government is considering for Budget 2007 and on which it
will be consulting in the months ahead.
Tax obligations for
newly registered businesses
This NAO report examines opportunities for Her Majesty’s
Revenue & Customs (HMRC) to improve on the help they offer to new
businesses.
Around 700,000 new businesses start up each year, all
required to register with HMRC for various liable taxes. For example, if a
business takes on employees, they will need to pay PAYE and if the business has
a turnover exceeding £61,000, they then become liable for VAT.
Barker calls for shake-up of planning laws
The Barker Review finds that the planning system affects
our quality of life, from the quality of the urban environment to our homes,
our jobs and our access to the countryside.
The purpose of Barker Review
was to consider how, in the context of globalisation and planning reforms,
planning laws can revised to deliver economic growth while ensuring sustainable
development.
Major changes in company law reform
The Companies Act 2006 makes it easier to set up and run a
company. Small businesses will benefit and, for the first time, a statutory
statement of directors' duties has been created.
"Banking the unbanked": promoting financial
inclusion
Financial exclusion can impose significant costs on
individuals and be a barrier to employment and enterprise.
Many people
are still facing problems in opening basic bank accounts and operating them to
maximise their value.
Proposals to reform private pensions
It is estimated that around seven million people are currently not saving enough to support themselves in retirement.