Fallon: HMRC rewarding failure

The Treasury is failing to lead by example over delivering value for money after HM Revenue & Custom bosses were paid £23 million in bonuses despite department failings, claims Michael Fallon of the Treasury committee.

His comments follow the committee's report into the administration and expenditure of the chancellor's departments.

Mr Fallon said: "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 committee's report found Value for Money Delivery Agreements – detailing individual departmental efficiency programmes across the Treasury – were disappointing their failure to fully address the key issues of disclosure, measuring quality of service and the need for external challenge.

Questions were also raised over recent capability reviews of HMRC and the Treasury.

HMRC was found to have failed to meet targets for processing VAT receipts and to improve the tax credit.

Mr Fallon went on to call in 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 per cent increase in their bonus payments," The Conservative MP said.

"These payments appear completely unjustified."

The report also questioned why the government was still failing to appoint professionally-qualified finance directors in all departments.

Mr Fallon said: "I find it astonishing that the government has recently recruited a finance director with no relevant professional qualifications to the Ministry of Defence to run one of the most significant departmental budgets."