South Norfolk MP Richard Bacon has called on Home Secretary John Reid to get the Home Office accounts in order, as the head of Parliament’s financial watchdog offered a qualified opinion on the Home Office’s 2005-06 accounts.

Mr Bacon, a member of the Commons public accounts committee, was speaking as Sir John Bourn, Comptroller and Auditor General and head of the National Audit Office (NAO), presented his General Report to Parliament.

Last year Sir John took the rare step of issuing a disclaimer of opinion on the Home Office’s 2004-05 accounts because he was unable to reach an opinion on their truth and fairness. The National Audit Office is therefore unable now to express an opinion as to the truth and fairness of the 2004-05 comparative figures for the Statement of Parliamentary Supply, the Operating Cost Statement, the cash flow statement, and the statement of operating costs by departmental aim and objectives.

Mr Bacon said today: “Last year’s utter failure by the Home Office to exercise proper financial control has cast its shadow over this year’s accounts.  Because the 2004-05 figures cannot be audited, Parliament will be denied the full picture over the Home Office’s finances.  The Home Secretary must see to it that the Home Office’s  accounts are put in order without delay”.

HM Revenue and Customs
The report also finds that HM Revenue and Customs (HMRC) overpaid £1.8 billion and underpaid £0.5 billion in tax credits in 2004-05 and  the National Audit Office  expects the position for 2005-06 to be similar.  HMRC has struggled to resolve disputes about recovering overpayments and thus wrote off £397 million in 2005-06, with a provision of £409 million made for doubtful debts.

The report also finds that missing trader fraud is estimated to have cost HMRC up to £3 billion in lost revenue and that criminal gangs are reacting quickly to the measures taken by HMRC to stamp it out.

Mr Bacon added: “The tax credits system remains in disarray and continues to make life difficult for vulnerable people.  HM Revenue and Customs have again failed to bring the system under control. This is unacceptable and HMRC must do better”.

“Missing trader fraud is also a growing problem and £3 billion is a huge amount of revenue to lose to criminal activity.  HMRC must make sure it uses the new powers given to it by Parliament to put a stop to missing trader fraud”.

9 February 2007

See also:
NAO REPORT: Comptroller & Auditor General's Report 2005-06
PARLIAMENT: MP condemns 'casual disregard' for taxpayers
PARLIAMENT: Home Office accounts 'a national disgrace' - MP