The chair of an influential Commons spending watchdog has branded the Government's attempt to capture the entire financial position of the public finances as ‘more of an elaborate accounting exercise than a meaningful tool'.

The Public Accounts Committee's (PAC's) report on the second set of Whole of Government Accounts (WGA) - which set out the combined accounts of more than 1,500 public bodies for 2010/11 - found the information didn't provide a complete picture of the Government's liabilities and assets

Although the Bank of England is now included, notable omissions cited by MPs included Government owned or controlled bodies such as the Royal Bank of Scotland, Lloyds Banking Group and Network Rail, which the PAC argued should be included under normal accountancy practice.

Margaret Hodge, who chairs the PAC, said the WGA statement fails to identify key financial risks facing taxpayers such as the £17.5bn costs of NHS negligence, some 706 private finance schemes totalling £144bn and high nuclear decommissioning costs – estimated at £61bn.

She said the accounting exercise should also allow the public to track government progress in tackling fraud and error, which costs £21.2bn annually

‘The publication of the WGA is in part about improving transparency, but the accounts in their current form are impenetrable to most ordinary people, said Ms Hodge. ‘They should be clearer and easier to understand.'

Gillian Fawcett, head of public sector at the Association of Chartered Certified Accountants also questioned whether the accounts represented true transparency and accountability.

‘Making data widely available should not been seen as a substitute for effective financial scrutiny by parliaments. These accounts can only be meaningful if decision makers are analysing them and reflecting on them for making sound, transparent and accountable future policy decisions,' Ms Fawcett added.