HISTORIC PRESS RELEASE : Biggest Reform of Public Finance Management since the Gladstone Era [November 1999]

The press release issued by HM Treasury on 19 November 1999.

The biggest reform and modernisation programme in the management of the country’s public finances since the Gladstone era was announced today by Chief Secretary to the Treasury, Andrew Smith.

The Government Resources and Accounts Bill (RAB), published today, is part of the government’s fiscal framework aimed at its modernising agenda and is to apply the financial reporting practices of the private sector and much of the public sector to central government.

Welcoming the Bill, Andrew Smith said:

“Resource Accounting and Budgeting is a vital part of our modernising agenda and this Bill marks a major milestone on our way to full implementation. It demonstrates this Government’s commitment to introducing best-practice accounting methods in line with the Code for Fiscal Stability.

“Through Partnerships UK, the Bill will also give the public sector access to private sector skills. I want to see the progression of well-structured Private Finance Initiative (PFI) and Public Private Partnership (PPP) projects delivered in all sectors of the economy. This will bring about improved front line services to the public, increased deal flow togther with a reduction in the cost, delay and uncertainty by bidders for PFI projects.”

The main purposes of the Bill are:

• to introduce Resource Accounting and Budgeting into Government accounts and to modernise the operation of other aspects of the Exchequer and Audit Departments Acts;
• to provide enabling legislation for the preparation and audit of consolidated accounts for the whole public sector;
• to spend the money required to set up Partnerships UK to facilitate a new body designed to make the public sector a better client in PFI/PPPs.

The Resource Accounting and Budgeting Bill will improve the way Parliament votes and scrutinises public spending. Objectives and outputs will be costed through RAB, underpinning the Public Service Agreements. There will also be better information on buying and using assets with improved comparisons between PFI/PPP projects and government capital spending.