Chancellor’s Departments Failing To Lead By Example, UK MPs Say

by Jason Gorringe, Tax-News.com, London

10 March 2008

The Treasury Committee on Friday published its seventh report of session 2007-08, entitled 'The Administration and expenditure of the Chancellor’s departments, 2006-07'.

It constitutes the first report by the Committee’s Sub-Committee on its annual scrutiny of the Chancellor’s departments.

Michael Fallon MP, Sub-Committee Chairman, commented that:

“The Chancellor’s departments, which are the engine of Government spending, should be able to demonstrate clear progress against their targets. Sadly in some areas, such as the Value for Money Delivery Agreements, we have found them failing to lead by example. If they can’t get this right, how can any other department be expected to?”

The Report reviews the Value for Money Delivery Agreements, which were intended to give further detail about individual departmental efficiency programmes, over the Treasury Group as a whole.

In view of the extent to which these agreements were portrayed by the Government as a new departure in efficiency reporting, the Committee stated that it found the Treasury Group’s Delivery Agreement disappointing in its failure to fully address the key issues of disclosure, measuring quality of service and the need for external challenge.

The Report also noted the worrying conclusions of the recent Capability Reviews of HMRC and HM Treasury, discussed progress made towards HMRC’s Public Service Agreement targets, and raised concerns about slippage on a number of targets. HMRC’s continued failure to meet its target of processing VAT receipts and to improve the administration of tax credits are cause for particular alarm, according to the report.

Questions were also raised about the ongoing headcount reductions at HMRC, and the Committee called on the Government to urgently address the decline in the quality of HMRC’s services.

“HMRC appears to be rewarding failure. Complaints about the tax credits system are at the highest level for five years, there has been a considerable deterioration in its vat service and yet senior staff have received on average a 60% increase in their bonus payments. These payments appear completely unjustified,” Mr Fallon added.

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