MPs attack 'reward for failure' payouts at Revenue & Customs

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The Independent Online

A cross-party committee of MPs has criticised the Chancellor of the Exchequer's own civil servants for appearing to "reward failure" with generous bonuses paid to HM Revenue and Customs bosses despite their high-profile administrative disasters.

The Treasury Select Committee's Report into the Chancellor's departments suggests that, far from being a spur of efficiency throughout Whitehall, they cannot even run themselves. Michael Fallon MP, the chairman of the sub-committee that produced the findings, 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 found the Treasury's own Delivery Agreement "disappointing in its failure to fully address the key issues of disclosure, measuring quality of service and the need for external challenge".

However, the MPs were most critical of HM Revenue and Customs, the subject of an especially embarrassing scandal last year when they lost discs containing millions of taxpayers' details. The report says that "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". Mr Fallon added: "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. These payments appear completely unjustified."

The Liberal Democrats' Treasury spokesman, Vincent Cable, said: "It is clear that the days of prudence in the Treasury are well and truly over. With millions of personal records lost, a tax credit system in chaos and the debacle of Northern Rock, why on earth does the Treasury think it is appropriate to increase staff bonuses by 60 per cent? The Treasury has been a failing department for several years and bonus payments should reflect that."

Separately, it emerged last night that IT projects for pensions and benefits systems at the Department for Work and Pensions are running £315m over budget, and 21 years late.