The double-digit increase in bonuses paid to HM Revenue & Customs staff has been attacked by Treasury Committee MPs, who are demanding an explanation from the government.
Bonuses at HMRC for 2006/2007 climbed 60% to £7.7m for senior managers. The total bonus pot for all staff was £18.9m, a 72% rise.
MPs are concerned that such large bonuses were been paid during a time of headcount reductions and poor performance at the department.
Michael Fallon, Treasury sub-committee chairman, said: '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 percent increase in their bonus payments. These payments appear completely unjustified.'
The MPs called for HMRC and the Treasury to list all bonus payments alongside other remuneration in annual accounts.
In its report on administration and expenditure in the chancellor's departments, the committee raised further concerns about the level of financial expertise within government departments.
The report criticises the government for failing to appoint a qualified finance head at each department by December 2006, as it had promised. The appointment of Trevor Woolley as FD for the Ministry of Defence came in for particular criticism.
'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,' Fallon said.
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