Today, the Mail on Sunday has reported on the “slump” of the British pound since Brexit, which the paper claims has in turn caused the Government to “lose tens of millions of pounds”.
The journalist is actually referring to “adjustments” as seen on any organisation’s Annual Report and Accounts, as a result of standard accountancy practices, applied by all international trading organisations as dictated by national and international accounting standards.
These practices simply refer to a “translation” from foreign currency into sterling which can generate gains or losses. In 2016, for example, the comparative figure was a gain of about £5m.
The figure as detailed in DFID’s accounts does not represent a charge in cash terms and nor does it involve cash payments leaving the department.
As this is an issue which affects a number of Government departments, a joint statement was issued to the Mail on Sunday:
A Government spokesperson said:
When we convert foreign currency into sterling it generates gains or losses, this is exactly the same for any organisation. Managing the impact of exchange rate changes is part of the normal responsibilities of government.