Taxpayers face £16bn bill for clinical negligence claims

By Graham Fahy

Clinical negligence claims could cost the government nearly £16 billion, "staggered" MPs have warned.

Government accounts for 2009/10 scrutinised by MPs showed outstanding negligence claims make up 15% of the government's planned future expenses, prompting the Commons' public accounts committee to attack the Treasury's "poor" understanding of its potential liabilities.

Its report expressed alarm at the absence of plans to reduce the estimated £15.7 billion cost to the taxpayer of meeting these claims.

MPs were also unimpressed by the government's surprise that it had to write off £10.9 billion in unpaid taxes.

Committee chair Margaret Hodge acknowledged that the 'whole of government accounts' (WGA) was a "major step forward in improving transparency and accountability".

But she said they fell short of providing a "true and fair view" of the UK government's financial position.

"The Treasury has departed from accounting standards by leaving out of the accounts such bodies as Network Rail and the publicly owned banks," Ms Hodge said.

"This has led to the accounts being qualified by the comptroller and auditor-general.

"We want the government to provide the necessary information so that these accounts are comprehensive and credible. They will undoubtedly be very valuable."

MPs were also critical of the time taken in the preparation of the accounts. "The WGA is out of date, having taken some 20 months to be prepared," Ms Hodge added.

"Countries such as France, the USA and Australia can produce similar accounts in less than nine months, so this must get better."

MPs see the WGA as giving the Treasury the potential to strengthen the management of public finances by helping it identify future pitfalls.

Used correctly, they can assist government "to make better decisions and we will be able to judge them more effectively on value for money", the report noted.