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Constitutional Reform and Governance Act 2010

Part 5 Background – Transparency of government financial reporting to Parliament

44.There are a number of different systems which have an impact on the control and presentation of government expenditure. These include HM Treasury budgetary controls, supply estimates presented to Parliament for approval and resource accounts prepared by departments at the end of each financial year.

45.These different systems mean that there is significant misalignment between the different bases on which financial information is presented to Parliament and the public. Government financial documents are published in different formats, and on a number of different occasions during the year. This makes it difficult to understand the links and inter-relationships between them.

46.In July 2007 the Government announced in The Governance of Britain Green Paper a “Clear Line of Sight” (Alignment) Project to simplify its financial reporting to Parliament by better aligning budgets, estimates and resource accounts. The Treasury submitted detailed proposals for better alignment to Parliament in a Memorandum in March 2009 (Cm 7567). The Liaison Committee of the House of Commons responded to the Government's proposals in its report Financial Scrutiny: Parliamentary Control over Government’s Budgets (HC 804), published on 3 July 2009. The report accepted, on behalf of the relevant select committees of the House of Commons, all of the Government's proposals for a better aligned public spending framework as set out in Cm 7567.

47.Part 5 of this Act deals with an aspect of the Alignment Project. Section 43 amends the Government Resources and Accounts Act 2000 (“GRAA 2000”) in order to allow the Treasury to issue directions about the way departments prepare supply estimates and to direct that such estimates are to include information relating to “designated bodies”. This provides for departmental estimates and accounts to include the spending of Non-Departmental Public Bodies and other central government bodies for which the departmental has responsibility, thereby aligning with the budgetary treatment. This section also includes provision preventing the designation of a body if it is funded solely from the Scottish Consolidated Fund, the Consolidated Fund of Northern Ireland or the Welsh Consolidated Fund and makes consequential amendments to the GRAA 2000.

48.Section 44 amends Part 5 of the Government of Wales Act 2006. The changes simplify the arrangements for financial reporting and accountability to the National Assembly for Wales (the “Assembly”) by better aligning the contents of the annual budget motion with the use of the resources set out in the resource accounts produced by Ministers and other persons to whom the Assembly votes resources.

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