IMF Publishes Fiscal Transparency Evaluation for the United Kingdom
IMF News, November 16, 2016
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- Published: November 16, 2016
Summary
- The United Kingdom scores highly on the Fiscal Transparency Code compared to other countries, according to a Fiscal Transparency Evaluation published by the International Monetary Fund (IMF).
- The Government of the United Kingdom requested the evaluation, which 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.
Key findings (organized by the Code’s four pillars)
- Fiscal reporting
- Comprehensive coverage of the whole public sector, including details of the full public sector balance sheet.
- Places the UK at the forefront of fiscal reporting practices worldwide.
- Outstanding issue: long delays in publication of end of year financial statements reduce their usefulness for informing future-year fiscal policy.
- Fiscal forecasting and budgeting
- High-quality practices based on credible and thorough macro-fiscal forecasts and a comprehensive medium-term budget framework.
- Budget documentation is clearly understandable and comprehensive.
- Outstanding issue: frequency of changes in fiscal policy objectives, and the Autumn Statement effectively evolving, in recent years, into a mini budget, makes it difficult to fully grasp how fiscal policy is implemented through the budget.
- Fiscal risk reporting and management
- Particularly strong on risks related to the macro-economy, the long-term sustainability of public finances, and the financial sector.
- Outstanding issue: absence of a comprehensive summary report of specific fiscal risks (authorities intend to address this in 2017).
- Resource revenue management
- Area of diminishing importance, but transparency of revenue management practices is strong.
- Observed developments over the last three years include clearer allocation of regulatory responsibilities, simplification of the taxation system, and increased disclosure by petroleum companies.
Key recommendations
- Enhance consistency between the audited Whole of Government Accounts (WGA) and the Public Sector Finances (PSF) outturn reports.
- Accelerate publication of the WGA to nine months after the end of the reference period.
- Concentrate major tax and spending decisions into a single fiscal event.
- Adopt new fiscal objectives as a matter of priority.
- Publish a comprehensive fiscal risk report.
Authorities’ reaction and follow-up
- The UK authorities welcomed the report’s findings and its publication.
- The authorities intend to produce a comprehensive summary report of specific fiscal risks in 2017.
Contact and publication metadata
- Press Release No. 16/509
- November 16, 2016
- IMF Communications Department
- MEDIA RELATIONS PRESS OFFICER: Wiktor Krzyzanowski; Bruno Silvestre
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- Further information about the Fiscal Transparency Code and Evaluation can be found at (http://imf.org/fiscaltransparency)
Press Release No. 16/509, November 16, 2016, International Monetary Fund.