Magazine article Public Finance

Watchdog Watch

Magazine article Public Finance

Watchdog Watch

Article excerpt

WHAT'S GOING ON IN THE WORLD OF REGULATION AND INSPECTION

National Audit Office

The Treasury needs to undertake a rigorous assessment of the £40bn UK Guarantees programme to determine whether government underwriting is necessary in all cases and work out if the projects will deliver public value, the National Audit Office has said.

Under the scheme, the Treasury assumes the risk faced by lenders in return for a fee, promising to repay in full and on time, regardless of a project's performance. Once guarantees are issued they cannot be withdrawn or the fee changed if risks or prices alter.

The NAO said that, while the scheme can help to progress infrastructure projects, eligibility criteria have not been strictly applied, nor have tests determined if a guarantee is necessary. It was not confident that the benchmarks measuring risk to the taxpayer are sufficiently reliable.

The Treasury responded that it has 'full confidence' in the scheme and all projects endure rigorous due diligence, comparable to the private sector.

Separately, the NAO found that cancer treatment outcomes vary significantly across England despite improvements to NHS provision since 2010. Analysing quality of treatment, auditors found survival rates for people diagnosed since 2008 have improved. However, five-year survival rates for those diagnosed between 2000 and 2007 remained about 10% lower than the European average.

Patients aged 55-64 are 20% more likely to survive for at least a year after diagnosis than those aged 75-99. There would be nearly 20,000 fewer deaths from cancer each year if mortality rates for all socioeconomic groups were the same as for the least deprived.

The auditor general gave the Department for Education an adverse opinion after concluding it failed to meet Parliament's accountability requirements on academy spending.

Amyas Morse said the level of error and uncertainty in the statements was both material and pervasive. He also qualified his opinion because the department exceeded one of its expenditure limits.

Morse said the DfE faces financial management challenges in accounting for the spending of academies, alongside its executive agencies and public bodies. For 2013/14, there are 2,591 bodies consolidated into the group financial statements, including 2,585 academy trusts operating 3,905 individual academies, with different reporting periods applied.

CIPFA chief executive Rob Whiteman said the qualification demonstrates the difficulty in providing consistent, timely, consolidated reporting for relatively new organisations such as academies.

Charity Commission

The Charity Commission is improving its regulatory regime after criticism of its effectiveness, the National Audit Office has found.

After reporting in December 2013 that not enough was being done to identify and tackle abuses of charitable status, the NAO's follow-up said a 'credible' change programme is now in place.

The charity watchdog has developed a new business model that focuses more resources on high-risk cases and aims to automate low-risk transactions. Under new chief executive Paula Sussex, it has also put in place a plan to become more proactive, boosting investigations through £8m in one-off funding from the Treasury and making better use of enforcement powers.

Commission chair William Shawcross said the NAO's findings were a 'vote of confidence' in reform plans. …

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