Watchdog refuses to sign off UK public sector accounts over unreliable data

National Audit Office disclaims' accounts because of shortcomings in auditing of English local authorities

The government's entire public sector financial accounts are not fit for purpose, the official audit watchdog has said after the collapse of the red flag" system that scrutinises billions of pounds of spending in local government.

The National Audit Office (NAO) said it was impossible to sign off the government's latest public spending figures as accurate because of the unreliability of financial data relating to hundreds of councils and police and fire authorities.