By IMF Press Office
The United Kingdom scores highly on the Fiscal Transparency Code as compared to other countries, according to the Fiscal Transparency Evaluation published today by the International Monetary Fund (IMF). The Government of the United Kingdom (UK) requested the evaluation, and it was carried out in July by the Fund’s Fiscal Affairs Department.
Some 33 of the 46 transparency principles are rated as good or advanced, with only four regarded as yet to be achieved. The high scores reflect both the underlying strength of fiscal institutions and ongoing efforts to improve the transparency of public finances. The report’s key findings according to the Code’s four pillars are:
- Fiscal reporting is comprehensive, covering the whole public sector and including details of the full public sector balance sheet, placing the UK at the forefront of fiscal reporting practices worldwide. However, further reducing the long delays in publication of end of year financial statements would improve their usefulness in informing future year’s fiscal policy.
- Fiscal forecasting and budgeting are of high quality, building on credible and thorough macro-fiscal forecasts and a comprehensive medium-term budget framework, supported by clearly understandable and comprehensive budget documentation. However, the frequency with which fiscal policy objectives appear to change, combined with the Autumn Statement effectively evolving, in recent years, into a mini budget makes it difficult to fully grasp how fiscal policy is being implemented through the budget.
- Fiscal risk reporting and management practices are particularly strong on risks related to the macro-economy, the long-term sustainability of public finances, and the financial sector. However, there is a need to address the absence of a comprehensive summary report of specific fiscal risks, which is the authorities’ intention in 2017.
- Resource revenue management is an area of diminishing importance but, even so, the transparency of revenue management practices is strong with a move towards clearer allocation of regulatory responsibilities, simplification of the taxation system and increased disclosure by petroleum companies having been witnessed over the last three years.
Key recommendations in this report to strengthen ongoing fiscal transparency reforms include:
- Enhancing consistency between the audited Whole of Government Accounts (WGA) and the Public Sector Finances (PSF) outturn reports;
- Accelerating publication of the WGA to nine months after the end of the reference period;
- Concentrating major tax and spending decisions into a single fiscal event;
- Adopting new fiscal objectives as a matter of priority; and Publishing a comprehensive fiscal risk report.
The UK authorities welcomed the report’s findings and its publication. Further information about the Fiscal Transparency Code and Evaluation can be found at (http://imf.org/fiscaltransparency)