Sub-Committee Chairman Michael Fallon said:
"By nationalising financial institutions, the Government has taken on responsibility for significant liabilities. In order for effective public scrutiny to be performed by Parliament and our Committee, the magnitude and nature of these liabilities must be comprehensively disclosed. Monday’s additional package only increases the importance of accountability.
"We are therefore demanding that the Treasury quantify and disclose the liabilities involved in the extensive public funding of these banks. Given the amount of public money poured into them over the last six months, taxpayers deserve no less in this economic crisis.
"Public companies are required to publish quarterly data on their accounts and, given the scale of public investment, the taxpayer deserves no less information from the Treasury."
The Report recommends that these disclosures appear in the Treasury Group Resource Accounts, released annually. Furthermore they should be at least as comprehensive as those made by major corporations and go further than meeting the minimum acceptable accounting standards.
Northern Rock and Bradford & Bingley
In particular, the Report notes that the Treasury’s 2007-08 Annual Report and Accounts cover the Government’s financial relationship with Northern Rock but do not comment on its performance under temporary public ownership. Given the level of interest in the fully nationalised institutions of Northern Rock and Bradford & Bingley, and the Treasury’s role in their governance, the Report recommends that key performance information for these institutions be published in the Treasury Group Resource Accounts as well.
UK Financial Investments (UKFI)
The wholesale nationalisation of Northern Rock, and Bradford & Bingley has created governance responsibilities for the Treasury while these entities remain under public ownership. The Government’s announcements of October 2008 created further responsibilities regarding the oversight of part-nationalised banks, and created a new body, UK Financial Investments (UKFI).
The Report calls for UKFI to report annually to Parliament and to be accountable to the Treasury Committee. The Committee therefore wants the Government to identify and publish performance indicators for UKFI, and to report against these measures on a six-monthly basis.
All of these developments are additional challenges for the Treasury and require it to act in areas its current staff base may not be fully equipped for or familiar with. The Report therefore also calls on the Government to ensure the Treasury is sufficiently resourced to manage the extended responsibilities arising from the economic downturn, especially those regarding financial stability.
The work of the Valuation Office Agency regarding port operators
During the Committee’s inquiry a significant issue emerged regarding the Valuation Office Agency’s handling of the ports revaluation. The Report concludes that VOA communication on this issue was deficient and recommends that the Government take into account the fact that many Port Occupiers have already made significant payments to Port Operators towards business rates.
In light of the failings of the VOA and the compelling evidence that many businesses are being forced to declare themselves insolvent, the Committee also recommends that the Government considers maintaining port ratings at the levels published in the 2005 lists until the next scheduled revaluation of statutory ports is undertaken in 2010.