Auditors refuse to sign off Treasury accounts

Published on Monday 20 July 2009 22:00

WHITEHALL auditors have refused to sign off part of the Treasury's accounts over its exposure to potential bank losses.

The National Audit Office (NAO) has not passed the accounts in full as insurance granted to troubled banks Lloyds and Royal Bank of Scotland was not approved by parliament. It is thought to be the first time that the Treasury's accounts have been qualified. It will publish its annual report and accounts this afternoon – as MPs prepare to depart Westminster today for their summer recess.

Lloyds and RBS had potentially bad loans guaranteed under the Asset Protection Scheme this year as Prime Minister Gordon Brown and Chancellor Alistair Darling sought to stave off a banking meltdown.

However, a Treasury spokesman said:

"They have not expressed concern about the figures for the costs of interventions … which are consistent with the range of 20 billion to 50bn set out in the Budget."

Four other government departments – HM Revenue and Customs, the Department for Work and Pensions, the Ministry of Defence and the Home Office – are also expected to disclose that their accounts have been qualified by the NAO.