Treasury committee criticises Whitehall finance function

9 Mar 10
Financial reporting across government has come under fire in a report published today by MPs
By Lucy Phillips

9 March 2010

Financial reporting across government has come under fire in a report published today by MPs.

The Treasury select subcommittee criticises most central government departments and their associated agencies for failing to provide the Treasury with ‘accurate and timely’ monthly spending figures. It noted that ‘strong progress’ had been made in the professionalisation and modernisation of  the finance function. But it said that, in 2008/09, an average of only 13 of 59 bodies gave the Treasury adequate monthly data.

In evidence to the MPs, Treasury permanent secretary Sir Nicholas Macpherson admitted that, while all departments were on ‘an upward trajectory’, there was ‘a lot more to be done’. He added: ‘These targets are very new and are part of raising the bar in terms of departmental performance.’ He suggested that the situation could be improved by creating peer pressure among permanent secretaries and incorporating the targets into Whitehall’s Departmental Capability Reviews.

The subcommittee’s report, Administration and expenditure of the chancellor’s departments 2008/09, also reveals that the Treasury is continuing with its efficiency measures despite staff being at risk of ‘overstretch and burnout’ due to increased workloads as a result of the banking crisis and economic downturn. Macpherson told the MPs that the drive to save money was a means of freeing resources, and ‘in a crisis one needs to bring in more resources’.

The committee found it was not yet possible to calculate the total overall cost to the taxpayer of Treasury interventions during the financial crisis.

The report also condemns Revenue & Customs after ‘dire results’ from a cross-government staff survey, piloted by 11 departments that were being restructured. R&C was ranked last or next from last in 53 out of 67 questions.  Only 11% of staff said the change was being well managed and only 9% agreed that any changes made were for the better. 

Subcommittee chair Michael Fallon said: ‘We are particularly alarmed by the low staff morale and engagement at R&C, and its effect on performance. We are deeply troubled by the apparent absence of any plan to ameliorate the situation, and call on R&C management to redouble their efforts here.’

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