Policy paper

The User Preparer Advisory Group: meeting minutes

Updated 16 December 2020

This was published under the 2019 to 2022 Johnson Conservative government

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This publication is available at https://www.gov.uk/government/publications/user-and-preparer-advisory-group-minutes-january-2020/the-user-preparer-advisory-group-meeting-minutes

Attendees

Andrew Buchanan, Chair & Independent member

Andrew Firth, BEIS

Alex McNeill, Department for Transport

Helen Creeke, The National Archives

Jane Piccaver, Natural England

Henning Diederichs, ICAEW

Alison Ring, ICAEW

Gavin Freeguard, Institute for Government

Tom Pope, Institute for Government

Debbie Paterson, Healthcare Financial Management Association

William Moy, Full Fact

Jacqui McKinlay, Centre for Public Scrutiny

Vikki Lewis, HM Treasury and UPAG Secretariat

Joshua Rushbrooke, HM Treasury

On the phone

Gareth Davies, CIPFA

David Heald, University of Glasgow

Apologies

Ed Hammond, Centre for Public Scrutiny

Marcus Wilton, House of Commons

Andy Carter, HM Revenue and Customs

Item Presented Time Paper
Welcome and introductions Chair – Andrew Buchanan 1:15  
Background to the Government Financial Reporting Review & summary of work to date Vikki Lewis 1:20 UPAG 1 (1)
GFR Review - next steps Vikki Lewis 1:50 UPAG 1 (2)
UPAG Terms of reference Chair 2:20 UPAG 1 (3)
Thematic reviews Vikki Lewis 2:45 UPAG 1 (4)
AOB Chair 3:20 UPAG 1 (4)

Item 1: Introduction

  1. The Chair welcomed attendees to the first meeting of the User Preparer Advisory Group (UPAG) and provided a preface of the purpose and background for the initiation of the Group.

  2. The Group discussed the changes to corporate reporting in recent years and the importance of questioning why information is reported, and the value of the information contained or excluded from financial reports in the context of meeting the needs of the user.

  3. The Group considered the challenges facing preparers of financial reports particularly in the public sector and the impact of the new financial reporting standards which have resulted in considerable resource pressures.

  4. Despite these challenges, there was recognition of the longer-term opportunity for data to be available and accessible to users which should promote greater user engagement.

  5. Whilst financial reporting is a broad concept covering many different aspects of information produced in the public sector, the Chair clarified that the focus of the Group will be to consider financial reporting in the wider context of the performance report within annual reports and accounts and therefore not restricted to the financial statements or other financial information produced.

  6. The Group was advised that, as part of the Government Financial Reporting Review, a financial reporting landscape has been produced which maps the different financial reports produced across the public sector. Information, whilst of interest to the user, may not be appropriate for inclusion within annual reports and accounts but preparers may then signpost the user to where information may be found.

  7. Discussion followed on establishing the user of the annual report and accounts and ensuring greater accessibility as well as potential user dissatisfaction on the ability to understand the value for money and consistency of data.

Item 2: Background to the Government Financial Reporting Review & summary of work to date

  1. HM Treasury provided the Group with an overview of the Government Financial Reporting Review and set out the background to the Review and a summary of the work undertaken to date.

  2. It was highlighted that the GFR Review identified the primary user of government annual reports and accounts as Parliament although recognises other users. The Review also goes on to strongly encourage preparers of annual reports and accounts to engage with their respective parliamentary select committees in establishing the needs of users such as context and range of information of interest.

  3. Other areas of information to be reported of potential interest to users were raised including sustainable development and the impact on the business model of an entity and performance outcomes. It was agreed that this is an area which deserves more consideration by the Group going forward.

  4. The Group noted that the Redmond Review is ongoing and is likely to focus on the quality of narrative reporting within the local government sector including how financial sustainability is a key aspect of interest for users. The Group agreed this is also relevant to central government reporting.

  5. The Group noted the development of financial reporting in the private sector and the drive to align reporting frameworks. The Chair advised that the Financial Reporting Advisory Board (FRAB) will closely follow these developments and consider the impact on public sector financial reporting.

  6. HM Treasury thanked the Group for its recognition of the work undertaken as part of the Government Financial Reporting Review and progress made in improving the quality of financial reporting.

Item 3: Government Financial Reporting Review, next steps

  1. HM Treasury provided the Group with details of the next steps planned as part of the Government Financial Reporting Review.

  2. Discussion followed on the usefulness of the bank of best practice examples being developed which cover different elements of performance reporting within annual reports and accounts from the performance report, accountability report and financial statements. The Group heard how it is the intention to build a bank of best practice in each of these areas of performance reporting over several years which preparers may access and help improve the quality of reporting.

  3. The Group suggested that areas of poor practice should also be shared to strengthen the initiative as well as successful practice of reporting outcome of measures.

  4. It was noted that the Institute for Government undertakes a similar exercise and publishes the Whitehall Monitor Report.

  5. HM Treasury asked the Group to provide examples of best practice both in the public and private sectors which may be included within the bank and shared with preparers of annual reports and accounts in government.

  6. The Group agreed to share examples with HM Treasury.

  7. HM Treasury also advised the Group that digitalisation of annual reports and accounts was a long-term ambition however, there are parliamentary limitations to doing so including the current requirement to lay a paper copy of the report in Parliament.

  8. The benefits of digitalisation were discussed including the ease of access to information. HM Treasury advised that there is a mandatory requirement introduced from 2020-21for entities to produce financial data in Excel format to enable data interrogation.

  9. The National Archives confirmed that it is working closely with Parliament to introduce greater digitalisation. It was also noted that the FRC is undertaking a review of digitalisation of financial reporting.

Item 4: UPAG Terms of Reference

23.The Chair introduced the draft terms of reference shared prior to the meeting.

  1. Discussion first looked at the Group’s aims and it was suggested that the Group should also monitor the progress of improvements made to performance reporting following the sharing of feedback to preparers, i.e. part c, of the draft Group aims.

  2. The scope of the Group’s aims was explored including if the Group should look to consider other areas of user interest which could be included within annual reports and accounts, for example, the entity’s actions on climate change and other elements of financial reporting.

  3. In respect of responsibilities for the Group, it was felt that greater clarity was needed on the input in the annual cycle of guidance and if for example, the intention was to comment on the Financial Reporting Manual.

  4. The Chair clarified that the role of FRAB is to approve the Financial Reporting Manual and it was outside the scope of this Group. However, there is an opportunity for the Group to recommend ways in which guidance could be improved and as such, it would be beneficial for the timing of Group meetings to mimic those of FRAB and be held 3 times per year, slightly before those of FRAB. This was agreed with dates of future meetings to be finalised.

  5. The Group agreed that it would benefit from a better understanding of the suite of financial reporting guidance produced and the author of the guidance.

  6. HM Treasury agreed to provide the Group with more details of guidance produced.

  7. The Group discussed the definition of financial reporting within the context of the responsibilities in the terms of reference. It was noted that there should be greater clarity on its scope and reference the inclusion of narrative reporting in annual reports and accounts.

  8. It was agreed that the Group has a responsibility to reach out to other users for more opportunity to provide feedback on the quality of financial reporting. Further reflexion should be given to this at future meetings.

  9. A question arose about the term, “accessibility” and the context of its use. It was agreed that it is to be used in a broad sense to reflect openness, ease of access, use and understanding.

  10. The Group agreed that it should also have responsibility to consider how to support preparers of annual reports and accounts and it was agreed that it would look to identify tools to do so.

  11. It was agreed that minutes of the meetings, papers considered, and terms of reference, once agreed, would be made available on gov.uk.

  12. It was agreed that the terms of reference would be updated and considered at the next Group meeting.

Item 5: Thematic reviews

  1. HM Treasury provided the Group with background to the introduction of thematic reviews and details of the first two thematic reviews almost completed.

  2. The first thematic review, a post implementation review of IFRS9 and IFRS15 is due to be published before the end of January 2020. The second review on the Statement of Parliamentary Supply was undertaken in part, during the public consultation on the Financial Reporting Manual and is due for publication before the end of March.

  3. The Group was advised that thematic reviews will be published on gov.uk.

  4. Although several potential topics had already been identified, HM Treasury advised the Group that ideas for future thematic reviews is a key area of its responsibility and it is invited to put forward proposals going forward.

  5. The Group examined possible areas including the transparency of reporting of major government projects, the quality of reporting summary performance information including making recommendations, the feasibility and challenges associated with tracking commitments, and the quality of staff reports.

  6. It was agreed that areas of thematic reviews would be included on agendas for future meetings.

Item 6: AOB

42.There were no items of other business.

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