Committee publication · Correspondence · 6 July 2026
Letter from the Director General of Spending at HM Treasury relating to Treasury Minute Response – Small Bodies Reporting Regime, 26 June 2026
Summary
HM Treasury responds to the Public Accounts Committee's April 2026 report on accountability in small government bodies. Treasury acknowledges the burden of reporting requirements on smaller bodies and confirms it is undertaking a comprehensive review of central government financial reporting, audit requirements, and a potential small bodies reporting regime, with findings due by March 2027.
Key findings
- NAO identified that only 48 bodies met the small body definition (c.12% of NAO-audited bodies), prompting Treasury to consider broader reforms beyond this subset
- HM Treasury is reviewing whether existing reporting requirements could be streamlined and considering application of IFRS 19 accounting standards to reduce narrative disclosure burdens
- Timeliness of central government reporting has decreased in recent years partly due to changing reporting and audit requirements; Treasury is assessing the balance between quality, timeliness, and value for money
- Treasury is engaging with the NAO to make audit proportionate and is working with the Financial Reporting Advisory Board (FRAB) on options for small bodies financial reporting as part of wider central government financial reporting review
Tone
ProceduralTopics
Key actors
Conrad Smewing, Director General Public Spending, HM Treasury, Sir Geoffrey Clifton-Brown, Chair of the Public Accounts Committee, HM Treasury, National Audit Office (NAO), Financial Reporting Advisory Board (FRAB), Comptroller and Auditor General
Notable line
“HM Treasury is actively considering whether the correct balance is being struck between the delivery of high-quality financial reporting, timeliness, and value for money.”
Key Quotes
“HM Treasury shares the Committee's commitment to ensuring that central government reporting is timely and of high-quality.”
“Compliance with reporting requirements can be proportionately greater for smaller bodies as they have more limited resources and specialist expertise than larger organisations.”
“Only 48 bodies were captured by the definition of a small body adopted by the NAO in their report”
“HM Treasury will write to the Committee by March 2027 with an update on the progress of this review.”
Source · parliament.uk record ↗