Committee publication · Correspondence · 3 September 2025

Letter from the Treasury Officer of Accounts at HM Treasury relating to the spending incurred following the Afghan data leak and in relation to expenditure on the Afghan Response Route, 26 August 2025

Inquiry: Afghanistan Response Route (ARR)

Summary

Treasury Officer of Accounts David Fairbrother sets out HM Treasury's understanding of UK reporting rules governing disclosure of confidential financial information related to the Afghan data breach and Afghan Response Route spending. The letter clarifies accounting standards (IAS 37) for provisions and contingent liabilities, legal constraints on disclosure including court orders, and mechanisms for confidential reporting to parliamentary committees outside normal reporting cycles.

Key findings

Entities must recognise provisions on balance sheets where a present obligation exists and outflow of resources is probable; contingent liabilities must be disclosed where obligations are possible but not probable or amounts cannot be reliably measured.
IAS 37 permits entities to avoid disclosing provision details if disclosure would seriously prejudice position in dispute, allowing generic references to legal proceedings using anonymised language instead.
Ministers decide what confidential information should be shared with committees; concerns about risk to life in Afghan data breach meant information was restricted in public interest, subject to judicial oversight.
Spending does not automatically trigger parliamentary notification outside normal reporting cycles, but serious losses and contingent liabilities must be notified; confidential reporting to parliamentary committees is permitted where public interest demands confidentiality.
Comptroller & Auditor General must receive information needed to provide audit opinion on annual reports and accounts, even where public disclosure is restricted.

Tone

Procedural

Topics

public-financegovernment-accountabilitydata-protectiondefence-spending

Key actors

David Fairbrother, HM Treasury, Ministry of Defence, Sir Geoffrey Clifton-Brown, Public Accounts Committee, National Audit Office, David Williams

Notable line

“Where entities may have a liability to recognise on their statement of financial position, which may be the case with the Afghanistan national data leak, this needs to be assessed Page 2 of 3 against the FReM guidance on provisions, contingent liabilities and contingent assets.”

Key Quotes

“Recognise provisions on their statement of financial position (balance sheet) where there is a present obligation as a result of a past event and it is probable an outflow of resources is required to settle the obligation.”
— David Fairbrother · explaining IAS 37 accounting standard requirements

“IAS 37 paragraph 92 also permits an entity to avoid disclosing the nature of a provision if such disclosure would seriously prejudice the entity's position in a dispute.”
— David Fairbrother · setting out legal constraints on disclosure

“… concerns regarding potential risk to life have meant that ministers (in both the current and previous administrations) decided that it was in the public interest to ensure that information was restricted.”
— David Fairbrother · explaining ministerial decisions on Afghan data breach information

“… where ministers are of the view the public interest is best served by keeping information confidential, it may be appropriate for the accounting officer and the minister to agree whether there is the option of sharing the information with the relevant parliamentary committee(s) on a confidential basis and so facilitate scrutiny …”
— David Fairbrother · describing mechanisms for confidential parliamentary reporting

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Source · parliament.uk record ↗