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Humiliation for Darling as audit finds a hole in Treasury’s bank bailout figures
20 Jul 2009
Alistair Darling was embarrassed today when the Treasury's accounts were qualified for the first time in its 350-year history.
Moreover, after a huge rise in fraud and error in the tax credits system, auditors also qualified the accounts for HM Revenue & Customs and the Department for Work and Pensions.
When accounts are qualified it means auditors signify they have questioned information in them and disagree with the audited body's management.
The triple blow to Mr Darling came in a blizzard of critical National Audit Office reports being laid before Parliament this afternoon.
Fraud and blunders in handing out tax credits rose from 7.8 per cent to 8.6 per cent last year, despite a government target to reduce the level to five per cent by 2011.
The NAO said the true figure could be over 10 per cent, but nobody could be sure how bad it was. That would mean between £1.75 billion and £2.12 billion of taxpayers' money was being paid to crooks or the wrong people.
Fraud took up 50,000 cases costing £100 million and £200 million.
In its Treasury study, the spending watchdog was understood to have expressed concern about provisions in the accounts for billions of pounds used to prop up struggling banks.
Although Treasury officials insist it is just a “technicality” and did not show any kind of blunder, the decision is a blow to the Chancellor and to the prestige of the Government department that is supposed to ensure Whitehall sticks to the spending rules.
The NAO criticism covered the asset protection scheme which the Government unveiled in March to stabilise the loss-making banks. What concerned the inspectors was that there was not full provision made in the accounts for potential losses to the taxpayer.
But a Treasury official told the Standard the problem was purely down to the speed with which the emergency measure was introduced, which meant it was put in place before there was time for parliamentary approval.
The Ministry of Defence, the Home Office, and the Equality and Human Rights Commission were all having their accounts qualified.
Philip Hammond, the Tory Treasury spokesman, accused ministers of pushing out bad news on the last full sitting day of Parliament: “Just when MPs are about to break up for the longest summer holiday for years, it's a disgrace the Government is trying to sneak out these very important reports at the fag end of the parliamentary session.”
Reader views (3)
Crash Gordon and Dizzy Darling are just not qualified to be in government. They have wasted the country financially and socially. After the elections when they are free we should bring them to justice and I think these fraud cases have to be pursued. I want to see the Nu Liebor guys in prison where they belong!!
- Peteo, London, 19/08/2009 15:24
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I am not surprised - the whole tax "code" has become increasingly complex and difficult to understand. Reading the notes and guidance, there are frequent controdictions. Some of the verbal advice I have had from the VAT unit has been palin wrong, and when the queried by letter I was told I was "misinformed". My attempts at child tax credits have resulted in amazion quatites of paper - all starting with the same income figs, but with diffrent awards??????
These problems are not caused by those working in the system, but the whole overall structure is wrong. Tax is paid by us all and should be in a form that it can be understood by us all. The current tax code is a significant disincentive to people staring up companies, and overseas companies from setting up here or remaining here. Look at how many companies have left in the last few years - MacDonalds, Shire, WPP(at leat thinking about it), etc, etc.
Thank you Gordon and Alastair, you joing legecies will be felt (and paid for) for decades yet to come.
- Very Very Angry At Paying Tax For Mp'S Expeses, Home Counties, 20/07/2009 16:56
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any private individual, small company, sole trader, or other such organisation would face far worse from h.m customs and revenue and a whole host of other regulatory bodies established by the government if they relied on creative accountancy and fantasy figures.
so why shouldn't what's apparently good for the goose be hoisted on the gander.
in fact, given the responsibility of government departments and the fact that they dictate the running of the country and the nature and economic regime of the
population at large, they should be heavily punished for failiure and false accounting, both individually (personally responsible) and as an organisation.
heavy fines and prison sentances should be thre ultimate penalty when it isshown that ministers, mandarins and other responsible parties have been inept,cavalier, or machavelian.
- M.O'Brien, london.uk, 20/07/2009 14:03
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