The Treasury “neglects its role” as finance ministry, according to a critical report from the Public Accounts Committee (PAC)
In its report the influential cross-party committee said the government had “failed” in its attempts to boost lending with a “series of expensive experiments indemnified with taxpayers' money".
It argues the chancellor George Osborne’s department had “little understanding” of the risks or benefits of the £375bn quantative easing programme, and that the funding for lending scheme has not worked.
The PAC was delivering its verdict after examining the department's annual report and accounts for the financial year.
The findings will come as a further blow to the chancellor as fears grow over a triple-dip recession, with just over a month until the budget.
PAC chair Margaret Hodge, "The Treasury acts as both the finance ministry and economic ministry. But it appears to neglect its role as finance ministry. Its own accounts are impenetrable and this committee keeps seeing instances of poor decision making by departments, which the Treasury could and should have prevented.
"High staff turnover threatens the Treasury's ability to respond to crises and manage public spending effectively. While staff turnover fell in 2011-12, it is still very high.
"Furthermore, the Treasury remains committed to cutting its headcount by a third and there are still very few women at senior levels."
In response to the report, a Treasury spokesman said the department is, “focused on its job to support the government's strategy to deal with the country's debts and rebalance the economy to ensure Britain succeeds in the global race.
"Over the past two years over a million private sector jobs have been created, the deficit has been reduced by a quarter and interest rates have been at near record lows, benefiting businesses and families."
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