Amyas Morse, head of the National Audit Office, said more emphasis needed to be placed on quality, attainment and cost-effectiveness.

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Head of the NAO Amyas Morse - who last year declined to sign off HMRC's accounts because of tax credit fraud and error - said HMRC faced "significant" challenges.

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"Given the size of the pay increase given to consultants under the 2003 contract, it is reasonable to expect trusts to have made progress in improving how consultants are managed and realising the expected benefits of the contract, " its head Amyas Morse said.

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