Two Treasury departments came under fire yesterday for poor leadership, a failure to inspire and a “lack of humility”.

The two final reports from a Whitehall-wide performance scrutiny concluded that in his last years at HM Treasury, Gordon Brown led from the top in splendid isolation. His department failed to encourage team work, motivate staff or liaise effectively with other parts of Government.

“HMT needs to take early steps to tackle what is perceived by many to be a pressing need for greater inclusiveness and humility in its dealings with others,” the document said.

The second report, on the beleaguered Revenue & Customs department, which was also accountable to Mr Brown, paints an even bleaker picture of a department in chaos and lacking direction which has failed 75 per cent of its performance targets.

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The report calls on the department to take urgent steps to restore public confidence after the debacle of the lost child benefit discs. The publication of both reports is said to have been delayed so that they would get buried in the fallout over the lost discs.

The documents reveal departments struggling to implement policy and public service agreements, with little sense of how to retain and motivate staff and attract those with key skills.

The reviews, cloaked in management-speak, have been conducted by teams of civil servants, public sector chiefs and external advisers over the past 18 months, involving in-depth interviews with staff and managers.

They were commissioned by Sir Gus O’Donnell, the Cabinet Secretary, after Tony Blair expressed concern that Whitehall was not delivering policy fast enough and there was a lack of accountability at the top.

The Treasury won praise for setting direction, focusing on outcomes and planning and prioritising. But it was strongly criticised for failing to nurture talent and establish a workforce development strategy. The department also got poor marks for engaging and enthusing partners in team work. The report called for both areas to be urgently addressed.

Surveys of management, largely self-congratulatory, showed how out of tune the senior officials were with staff perception. the report said.

The team argued that the Treasury attracted high-calibre, talented and motivated people who demonstrated pride and excellence in their work. But it did not work hard enough to keep them. The most scathing criticism involves the Treasury’s failure to work with other Whitehall departments. During his ten years as Chancellor of the Exchequer, Mr Brown surrounded himself with a small coterie of advisers who dictated policy from the Treasury. Other departments were largely expected to fall in line with little negotiation or consultation.

The report said: “HMT should consider a more structured and regular assessment of its reputation among its principle stakeholders. It should work with other government departments to refresh its approach about how it monitors public spending while seeking jointly to improve performance.”

Revenue & Customs, which merged in 2005, gets bad marks for direction setting and not “igniting passion, pace and drive”. It is also criticised for failing to set direction or carry out evidenced based policy making, and an inability to develop clear roles of responsibility.

The report said it should take urgent action to restore its credibility after the child benefit discs fiasco.

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