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MPs blame Defra for poor budgeting

04/09/2008

Fishermen were among those who suffered as a result of poor financial management by the government, an influential group of MPs has said.

The public accounts committee says vessel decommissioning grants for trawlers leaving the fishing industry in 2006/07 had to be deferred because of mid-year budget reductions of £170 million.

In the following financial year it took five months for Defra's final budget to be confirmed, partly because planned expenditure exceeded the £3.6 billion allocated by the Treasury.

A failure of budget-holders to declare all commitments and the costs of managing floods and animal disease outbreaks also contributed.

MPs believe the problems are unlikely to occur in 2008/09 because of improvements to its financial management procedures.

But committee chairman Edward Leigh remains critical, saying Defra has provided a "clear example of poor financial management harming the delivery of services".

"The department has now established more rigorous financial and outcome monitoring systems but the many lessons of what had gone wrong should be closely studied," Mr Leigh added.

"Foremost among them are that a taut financial management culture has to be instilled throughout the organization, from the management board downwards.

"Central to that culture is recognition of the need constantly to scrutinise and challenge the financial management of resources and hold budget-holders to account."