MPs call on Treasury to reconsider UKFI relationship
Share
The Treasury select committee has urged the Treasury to consider whether its relationship with UK Financial Investments Ltd needs to be redefined.
In its report, Administration and expenditure of the Chancellor’s departments 2008–09, the TSC examines the Treasury, HMRC, the Debt Management Office, National Savings and Investments and the Royal Mint.
The committee, led by Labour MP John McFall (pictured), found that the relationship between the Treasury and the UKFI remains “a work in progress”.
In November 2008 the Treasury created UKFI to manage the Government’s investments in Northern Rock, Royal Bank of Scotland and the Lloyds Group.
It says: “We recommend that the Government considers whether the formal terms of the relationship need some redefinition in the light of experience.
“It is important that the lines of demarcation are clear, and reflect the reality on the ground, not least to ensure that other shareholders are properly protected.”
The TSC also criticises the Treasury for claiming that it met its targets for supporting low inflation, when it missed its inflation target for 11 months in the year.
The TSC says: “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.”
The TSC is reluctant to form definite conclusions about the Treasury’s success for 2008/09, saying much of the work is still ongoing. But it does acknowledge the increased challenges that arose during an “extraordinary year”.
The report states: “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.
“We appreciate the magnitude of the challenges faced by HM Treasury and its associated bodies during the course of this extraordinary year, and commend the extent to which the workforce has been willing to go the extra mile in response to these challenges.”
The committee recommends that the NS&I remains linked to the Post Office, rather than reduce its dependence on the Post Office in terms of distribution.
It says: “Whilst we recognise that it may make business sense for NS&I to move away from the Post Office, it is a Government-owned body.
“We recommend, therefore, that the Government considers whether there is a wider public interest in retaining stronger links between the Post Office and NS&I both to ensure that all sections of the public have easy access to NS&I products and to help secure the future of Post Offices.”
The TSC says performance at HMRC, particularly concerning low staff morale and customer experiences, “remains mixed with considerable room for improvement” and calls for HMRC to regularly publish data outlining its progress.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (1)
John Harding | 9 Mar 2010 1:24 pm
The Treasury set up UKFI 'to manage the Government's investments in NR, RBS and Lloyds'.
I am intrigued to know how the Treasury defines 'manage' in this context as UKFI does not appear to have done anything other than presumably 'holding' the Government investments in the above businesses.
In a dictionary 'Manage' is defined as 'To direct or control the use of' - 'To direct supervise or administer the affairs of' - 'To contrive or arrange, succeed in doing or accomplishing'.
Unsuitable or offensive? Report this comment