The National Audit Office has taken aim at the Ministry of Housing, Communities and Local Government for relying on a spreadsheet to model the value of billions of pounds worth of equity loans.
The government watchdog raised the red flag in its audit of the MHCLG’s accounts for 2024-25, which detailed “total managed expenditure” of £48.2bn.
The ministry's accounts highlighted a number of tech related achievements over the year. These included including launching its Atlas mapping tool, and delivering insight and data modeling to support decision-making. It also rolled out Power BI, and developed a Spatial Data Infrastructure Platform, “enabling the development, testing, and publishing of data products, pipelines, and analysis.”
The NAO issued a “clean audit opinion, providing assurance to Parliament on the financial statements.”
But the NAO also flagged up risk around the department’s help to buy equity loans portfolio. Help to buy was a government scheme to “help homeowners buying new build properties up to a value of £600,000”. The scheme was largely discontinued in 2023.
But, the NAO writes, “The Help to Buy equity loans portfolio dominates the Departmental Group’s statement of financial position, valued at £15.9 billion at 31 March 2025.” Or, put another way, the loan book is equivalent to almost a third of the department’s expenditure.
That valuation “is undertaken with reference to market conditions prevailing at the reporting date and the associated accounting and disclosure requirements are complex”.
However, the report said there were “known quality issues over data feeding into the estimate”.
And a spreadsheet application was used for modelling, with the model having to be split over multiple workbooks due to its size.
Even then, according to the NAO, a high degree of manual intervention was required to produce the final valuation, “bringing additional inherent risk.”
There was a significant risk of material misstatement, the NAO said. This included “risk that the method used for calculating fair value is not appropriate or in accordance with the financial reporting framework, that the data and assumptions used in the calculation of fair value are inappropriate, and that there is potential for errors in the modelling used to calculate fair value.”
The MHCLG is unlikely to be the only government department or business relying on spreadsheets to manage and analyse critical information.
The recently disclosed data leak which compromised the identities of thousands of Afghans and British military officials, was all down to the emailing of a spreadsheet outside of government.
And those “models” financial analysts like to talk about on earnings calls? Yes, often they’re spreadsheets. Albeit with really big numbers.
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