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This paper analyses the nature and impact of budgetary responses to the pandemic in the context of the strengths and weaknesses of UK public sector financial management.

The analysis is developed through consideration of four modes of government accounting. Data are drawn from multiple official sources, which report actual and forecast government receipts and expenditures as the crisis unfolds.

There have been dramatic effects on UK government finances. Government receipts have fallen by 12% and expenditures have increased by 36% in the first three months of the crisis (April–June 2020), compared to the previous year. Government debt increased to £1,984bn (99.6% of GDP), the highest percentage since March 1961 (ONS, 2020c). The pandemic will have the greatest impact on UK public finances in 2020–21, with a record budget deficit which, under the OBR (2020c) central scenario, may approach £322bn and increase public sector net debt to £2,205bn (104.1% of GDP).

The research is necessarily limited by the impact of the pandemic and the government's responses in a rapidly changing social, economic and fiscal environment.

Statistical accounting and budgeting dominate attention because of reporting speed and issues of international comparability. The pandemic has emphasised the importance of timeliness. Government financial reporting is marginalised, though this should not be permanent if the pandemic retreats. Fiscal sustainability analysis will warn that UK public finances are even more unsustainable than before the pandemic.

The interaction of higher levels of debt and future increases in interest rates might result in a new era of austerity and further centralisation of public power and economic decision-making in one of the world's most centralised democracies.

The paper provides an early, structured analysis of the impact of the COVID-19 emergency on UK government finances.

This paper aims to unravel the puzzle that the United Kingdom’s high-quality government accounting and fiscal architecture is associated with low-quality outcomes, including poor productivity growth, high public debt, public services which do not meet citizen expectations and historically high levels of taxation. It contributes to public sector accounting research in the fields of fiscal transparency and governance.

This paper uses Miller and Power’s (2013) economization framework and Dunsire’s (1990) concept of collibration to explain why being a global leader in public sector accounting reform and in fiscal and monetary architecture has not protected the UK from weak governance. The intersection of economization’s roles of accounting with modes of government accounting clarifies the puzzle.

Whereas accruals government accounting contributes to fiscal transparency, this is not a sufficient condition for well-judged policy and its effective application. Collibration is the dominant mechanism for mediation in the fiscally centralized UK, but it has failed to deliver stable outcomes, in part because Parliament is limited in its ability to hold back inappropriate behaviour by the Executive. Subjectivization has disrupted adjudication because governments at all levels resist constraints on their behaviour, with unpredictable and often damaging consequences.

This paper provides insights through the combined lens of economization and modes of government accounting, demonstrating the practical value of this conceptualization. Although some causes for unsatisfactory outcomes are specific to the UK, there are cautions for accounting and fiscal reformers in other countries, such as Member States of the European Union.

Budgetary reform in the UK since the International Monetary Fund (IMF) intervention under a Labour government in 1976 has been prompted by a new conventional wisdom that public expenditure was too high, and consequently, "crowded out" private sector investment. Although this belief became widespread in western democracies, in Britain it developed relatively early and was closely linked to the wider debate about Britain's relative economic decline. The first section of this article reviews the main reforms of the budgetary process which these concerns prompted.

In the second section we note that, despite the political concern with reducing public expenditure in the 1980s, success has been limited and priority is now the improvement of the underlying control and evaluation mechanisms in government spending. In practice, the main policy activity of the Thatcher administrations was on gaining "value for money" from existing expenditure. These developments are discussed and the likelihood of success considered. The nature of the present annual budgetary cycle is described as are the most recent developments designed to finally gain some form of effective expenditure control.

In Private Finance Initiative (PFI) projects, value for money (VFM) tests and accounting treatment are distinct but related issues. VFM analysis should be concerned with total risk, not just with the sharing of risk, which dominates the accounting treatment decision. A framework is developed for logical thinking about what is meant by “best VFM” in the context of PFI projects. This involves consideration of the full set of alternatives, not an artificially diminished subset. The credibility of analytical techniques can be tarnished if they are misused to legitimate a predetermined decision. A reduction in construction risk may be a powerful source of VFM gains under PFI, but, under UK accounting regulation, this should not influence the accounting treatment decision. New complications about how VFM should be interpreted arise directly from the process of public sector fragmentation: affordability to the client is not necessarily the same as VFM for the public sector as a whole. Only public auditors, such as the National Audit Office, can gain access to PFI documentation on the conditions necessary for a comprehensive assessment of both accounting treatment and VFM. However, such studies require the kind of theoretical underpinning provided in this article, as otherwise the findings are likely to be ambiguous and hence vulnerable to rebuttal. In particular, VFM judgements must make explicit the basis of comparison on which they rest.

Public private partnerships (PPPs) are a recent extension of what has now become well known as the “new public management” agenda for changes in the way public services are provided. PPPs involve organisations whose affiliations lie in respectively the public and private sectors working together in partnership to provide public services. This special issue of the Accounting, Auditing & Accountability Journal explores this new development, which, in its most advanced form, is contained in the UK’s Private Finance Initiative (PFI) but is now spreading across the world in multiple forms. This introduction provides an overview of this development as well as an outline of the seven papers that make up this special issue. These seven papers are divided into two parts – the first four looking at different aspects of PFI and the latter three providing three country‐based (from the USA, New Zealand and Australia) studies of PFI/PPP. Many questions about the nature, regulation, pre‐decision analysis and post‐project evaluation are addressed in these papers but many research questions remain unanswered, as this Introduction makes plain.

The purpose of this paper is to analyse how austerity has impacted to date upon European Union (EU) financial reporting developments and how this might influence future reforms. It considers how a critical juncture in EU financial reporting might be recognized and factors which might prevent or delay such a juncture being realized.

The paper uses the theoretical conceptualization of the territorializing, mediating, adjudicating and subjectivizing roles of accounting (Miller and Power, 2013), linked to document analysis and interviews with members of the relevant policy communities. In technical terms, austerity makes accounting subject to greater demands for consistency and uniformity. In political terms, accounting is implicated in increasing external fiscal surveillance of sovereign states.

The authors have shown how the Miller-Power framework illuminates these developments. The territorializing role of accounting in sovereign states creates an environment which facilitates the mediating, adjudicating and subjectivizing roles. Austerity promotes re-territorializing, yet also creates incentives for governments to hide risks and guarantees: the comparability of financial reports and national accounts may be achieved only at a rhetorical level. Evidence for a critical juncture would be termination of national traditions of financial reporting, greater harmonization of accounting across tiers of government, weakening of the linkages to private sector accounting, and stronger alignment of government financial reporting with statistical accounting.

The paper provides a theoretically based analysis of how austerity influences government financial reporting and statistical accounting and brings them into closer contact. This analysis is located within broader tensions between technocracy and democracy that are institutionalized in EU fiscal surveillance.

This research evaluates the value-for-money (VFM) obtained from public-private partnership (PPP) schools in Scotland, based on headteachers questionnaires, local authority interviews and Scottish School Estate Statistics. The period covered is 2000-2012, when 395 new schools were commissioned. The PPPs were better in building condition and maintenance standards and conventionally-financed schools were better in terms of teacher access and improvement in staff morale. There was transfer of knowledge whereby the high standards of the PPPs then became the new standards for the conventionally-financed schools. Concerns about PPP VFM relates to the high cost of unitary charges and contract inflexibilities. A higher percentage of headteachers of conventionally-financed schools (63.64%) considered their new schools resulted in good VFM compared to PPP schools (42.86%).

The starting point for the paper is an assessment of the impact of a 1993 special issue of Accounting, Auditing & Accountability Journal, which provided an interdisciplinary analysis of the pursuit of accountable management reforms in the UK public sector. From this assessment, the paper offers a set of reflections on the development over the last two decades of “new” public management practice and research, and also indicates some of the obligations and responsibilities of academic researchers and managers alike in the context of a continuing appetite for such reforms.

The paper is written in a reflective fashion, including assessments of: our role as guest editors of the special issue; the continuing pertinence of key messages emanating from the special issue; and broader considerations drawn from our own working experience in managerial roles in universities and personal reflections on the state of the public management literature.

The paper highlights the long‐standing litany of failure attached to such public management reform movements, as well as the limited degree of cross‐disciplinary learning within the field. The paper emphasises that we need to rethink the parameters of “public sector” (accounting) research, and avoid the partitioning of (accounting) research into ever smaller and self‐referential sub‐areas. We need more cross‐national studies. We need to know more about which management practices travel readily, and which travel less easily, and what happens when implementation is problematic. We need also to reinforce the importance of historical analyses, if we are to derive the most benefit from studies of the interrelations among accounting and public management reforms and wider transformations in ways of governing economic and social life. Finally, we need to retain or reinstate curiosity at the heart of our concerns, in order to dispel the self‐evidence or taken‐for‐grantedness of so much of our present.

Personal reflections, while being beneficially close to the subject under consideration, inevitably suffer from claims of bias and a lack of independence. We have sought to control for such risks by drawing on a variety of sources of information with respect to impact, including (albeit ironically) citation counts and an analysis of the writings of individual authors contributing to the special issue.

The paper is novel in that it seeks to combine an analysis of the literature on public sector accounting and management reforms over several decades with our own, multi‐faceted, engagement with public management research and practice.