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This briefing has been prepared for the Treasury Select Committee (the Committee) to provide an overview of the work and performance of HM Treasury in the financial year 2007-08 and subsequent months. This briefing focuses upon the Treasury’s internal management and its financial position as a department in its own right.

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This briefing has been prepared for the Treasury Select Committee (the Committee) to provide an overview of the work and performance of HM Treasury in the financial year 2007-08 and subsequent months. It focuses upon the Treasury’s internal management and its financial position as a department in its own right.

Key Issues:

  • Financial stability – The recent and ongoing instability in the financial markets has affected the operations of the Treasury and also had an impact on their financial statements for the financial year 2007-08. These include the Treasury’s acquisition of Northern Rock on 22 February 2008  and the Special Liquidity Scheme announced on 21 April 2008 where the Bank of England swapped UK Treasury Bills for high quality securities from banks, some of them mortgage-backed
  • Group Shared Services (GSS) – in 2006-07, the Treasury decided to deliver economies of scale through integrating and sharing core corporate services across the Treasury Group members, helping to drive through both a professional service to support the department’s corporate agenda, and meet the Treasury’s 2007 CSR settlement. Specifically, this has meant that the Information Services and Facilities; Human Resources; Internal Audit; and Finance and Procurement teams within the Office of Government Commerce (OGC) and core Treasury were merged in 2006. The impacts of this decision can be seen in the Treasury’s 2007-08 Resource Accounts as the Group continue to embed the programme
  • Capability Review – in 2007, the Treasury underwent a Capability Review led by the Cabinet Office, the aim of which was to assess the Department’s ability to meet current and future challenges
  • Public Service Agreement (PSA) targets – the 2004 Spending Review (SR2004) period ended on 31 March 2008. The Comprehensive Spending Review (CSR2007) introduced a new framework for PSAs and Departmental Strategic Objectives (DSOs)
  • Public sector implementation of International Financial Reporting Standards (IFRS) – As announced in Budget 2007, in order to bring benefits in consistency and comparability between financial reports in the global economy and to follow private sector best practice, the annual financial statements of government departments and other public sector bodies will in future be prepared using IFRS adapted as necessary for the public sector. Following consultation with departments and the Financial Reporting Advisory Board on the technical work needed to implement this change, the Government now intends to move to IFRS from 2009-10 to minimise burdens and to ensure a smooth transition.
  • Whole of Government Accounts (WGA) – The 2008 Budget announced that WGA will be published for the first time for 2009-10, a delay of one year, to enable WGA to be published on an IFRS basis.

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