ACCA welcomes Budget announcement to use balance sheet information to achieve sustainable public finances

Innovative approach to the UK’s fiscal framework is a gamechanger and puts finance at the heart of government decision making

The UK Budget has announced a new approach to the fiscal framework, taking a public sector balance sheet approach for the first time.

ACCA (the Association of Chartered Certified Accountants) has advocated for this development, most recently in a report called Sustainable public finances through Covid-19 published in June 2020.

In adopting this approach, the government will benefit from:

  • increased clarity on the true position of the public finances, alongside an understanding of the fiscal room available for further government action
  • improved value for money and financially sustainable policies, and
  • enhanced public sector resilience and the embedding of key financial metrics to drive performance management.

Alex Metcalfe, head of public sector at ACCA says: ‘This is an important and innovative development. The central recommendation of our June 2020 report called for governments to use accounting data and take a balance-sheet approach to effectively manage their finances through the COVID-19 crisis. We are delighted the Treasury has taken up this recommendation and announced a balance sheet approach today.

‘We also welcome the creation of the new Contingent Liability Central Capability, which will analyse and advise on ways to strengthen contingent liability expertise across government.’

Alex Metcalfe concludes: ‘The government is to be applauded for turning their attention to public sector balance sheets to manage their finances properly through this ongoing COVID-19 crisis. Balance sheet information can improve decision making, and it can act as the benchmark for new fiscal targets. It can also support governments in using sufficient fiscal firepower to rebuild their economies for a more inclusive, sustainable and greener future.’

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Helen Thompson
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About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global professional body for professional accountants.

We’re a thriving global community of 233,000 members and 536,000 future members based in 178 countries and regions, who work across a wide range of sectors and industries. We uphold the highest professional and ethical values.

We offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. Our qualifications and learning opportunities develop strategic business leaders, forward-thinking professionals with the financial, business and digital expertise essential for the creation of sustainable organisations and flourishing societies.

Since 1904, being a force for public good has been embedded in our purpose. In December 2020, we made commitments to the UN Sustainable Development Goals which we are measuring and will report on in our annual integrated report.

We believe that accountancy is a cornerstone profession of society and is vital helping economies, organisations and individuals to grow and prosper. It does this by creating robust trusted financial and business management, combating corruption, ensuring organisations are managed ethically, driving sustainability, and providing rewarding career opportunities.

And through our cutting-edge research, we lead the profession by answering today’s questions and preparing for the future. We’re a not-for-profit organisation. Find out more at accaglobal.com

"The government is to be applauded for turning their attention to public sector balance sheets to manage their finances properly through this ongoing COVID-19 crisis. Balance sheet information can improve decision making, and it can act as the benchmark for new fiscal targets. It can also support governments in using sufficient fiscal firepower to rebuild their economies for a more inclusive, sustainable and greener future."

Alex Metcalfe, head of public sector - ACCA