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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"The Department for Work and Pensions is working to manage the introduction of the housing benefit reforms, but their full impact is currently uncertain and depends on how households and the housing market react, locally as well as nationally, " said NAO boss Amyas Morse.

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