SUMMARY
An Extraordinary Year
HM Treasury and its associated bodies faced extraordinary
challenges during 2008-09. We draw out common themes, including
the extent to which they have had to take on new activity and/or
greatly increase the volume of normal activity. We consider how
successful they have been, and the cost in terms of pressure on
people and other work. We conclude that it is very difficult to
draw final conclusions regarding the level of success that should
be attributed to the Treasury and its associated bodies for 2008-09—too
much remains unfinished business, including HM Treasury's financial
stability interventions and its relationship with UK Financial
Investments Ltd (UKFI). We recommend that the Government considers
whether the formal terms of the relationship between the Treasury
and UKFI need some redefinition in the light of experience.
The Treasury Group's performance against objectives
We assess the Treasury Group's performance against
its two Departmental Strategic Objectives. We highlight that only
22% of bodies required to report monthly in-year figures to the
Treasury met the standards for timeliness and accuracy, and look
forward to seeing a significant improvement next year. We recommend
that the Treasury reflects on the terminology used to assess its
supporting low inflation indicator as "met-ongoing"
appears disingenuous when the target was missed in eleven months
out of twelve. We also conclude, in line with our earlier reports,
that the Government will fall well short of its Public Service
Agreement target to halve the number of children living in poverty
by 2010-11.
HM Revenue and Customs
Performance at HMRC remains mixed with considerable
room for improvement, and considerable challenges remain to be
overcome if HMRC is to achieve this improvement. We express concern
at the absence of milestone reporting, and urge HMRC to provide
more data in future. Noting a 7% increase in total recorded customer
complaints, we urge HMRC to reflect on whether customer experiences
of HMRC are yet improving as much as their summary of 'strong
progress' implies. Highlighting the dire results for HMRC of a
February 2009 cross-Government staff survey, we express deep concern
about employee engagement at HMRC and its effect on performance.
We recommend that HMRC's management re-double their efforts to
re-engage with their workforce, and publish a clear and detailed
plan to provide focus and direction to their actions. HMRC has
been slow to consider the possibility that the terms of its contract
with Mapeley could put the latter under immense financial strain.
We remain to be convinced that sufficient risk management, including
a clear and mutually beneficial way forward, is yet in place.
National Savings and Investments
NS&I was a 'safe haven' for savings at the height
of the economic crisis, and successfully processed a record amount
of new business. These exceptional circumstances posed a dilemma
for NS&I which has to tread a fine line between providing
a good deal for its customers and supporting Government macro-economic
policy. As extremely testing economic times are by no means at
an end, it is likely that NS&I's particular role and priorities
will continue to come under scrutiny. NS&I expects to reduce
its dependence upon the Post Office. We recommend that the Government
considers whether there is a wider public interest in retaining
stronger links between the Post Office and NS&I.
The Royal Mint
Profits and average rate of return dropped in 2008-09
compared with 2007-08. We note that the rate of return remains
relatively healthy. However, the Royal Mint only returned to profitability
in 2006-07, and positive future performance—now as a Government-owned
company—cannot be taken for granted.
Other associated bodies
Having been told previously that Ministers would
meet with port operators to discuss some of the issues arising
from the Valuation Office Agency's revaluation of UK statutory
ports, we were dismayed to learn that this has not occurred. We
are not impressed by the Government's decision to wash its hands
of problems which arise, in part, from its own insensitive handling
of port rate revaluation. We recommend that the Government urgently
reviews the impact of the revaluation on port occupiers, and publishes
its findings.
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