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PAC slams unclear Treasury accounts and policies

By Vivienne Russell | 15 February 2013

The Treasury’s accounts are ‘impenetrable’ and high turnover at the department is threatening its ability to manage public spending effectively, MPs said today.

Treasury spending cuts

In an excoriating examination of the Treasury’s annual report and accounts, the Public Accounts Committee said the department appeared to neglect its role as the UK’s finance ministry.

Chair Margaret Hodge said: ‘Its own accounts are impenetrable and this committee keeps seeing instances of poor decision-making by departments, which the Treasury could and should have prevented.’

Unclear accounts were a particular problem at a department that should be a proponent of clarity in financial reporting, the PAC said.

Hodge also criticised the high staff turnover at the Treasury, which impeded its ability to respond to crises, including another banking disasters.

The PAC said it had not been convinced that the Treasury understood the risks it had taken in indemnifying the Bank of England against losses on quantitative easing.

It also noted that the department’s attempts to stimulate economic growth through new lending schemes had not been successful. The National Loans Guarantee Scheme achieved just 15% of intended take-up and had now been replaced by a more generous Bank of England scheme.

‘The Treasury needs to be clear what it wants this Bank of England scheme to achieve, and how it intends to monitor it,’ Hodge said. ’These measures are characterised by a lack of goals and intended outcomes, with no means of monitoring progress. Throughout, the Treasury seems to be embarking on a series of expensive experiments with taxpayers’ money.’

The Treasury said it followed international accountancy standards and any complexities reflected the intricate nature of the department’s work.

A spokesman added: ‘The Treasury is focused on its job to support the government’s strategy to deal with the country’s debts and rebalance the economy to ensure Britain succeeds in the global race.

‘Over the past two years over a million private sector jobs have been created, the deficit has been reduced by a quarter and interest rates have been at near record lows, benefiting businesses and families.’

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Is one allowed to ask what qualifications and experience Ms Hodge and her colleagues have for judging the Treasury's accounts? If they are IFRS compliant they are absolutely certain to be "impeneterable"!

Mike Keene (15/02/2013 20:15:14)