28/06/2013 07:45 BST | Updated 28/06/2013 11:29 BST

Eric Pickles' Department For Communities And Local Government Runs Up £217m Overdraft

Eric Pickles' department has been reprimanded by the Whitehall spending watchdog after running up an unauthorised overdraft of £217 million.

It's an embarrassment for Department for Communities and Local Government with Pickles' regularly lecturing local councils on the need to get their finances under control and George Osborne praising Pickles as "the model of lean government".

Head of the National Audit Office (NAO) Amyas Morse announced that he was "qualifying" his regularity opinion of the department's financial statements because of its breach of Treasury spending limits.

Pickles: the model of lean government no more

The NAO disclosed that the Treasury had imposed a £20,000 fine on his department as a punishment for its poor financial management.

In a further setback, the NAO found that the department's local government capital expenditure limit of £80,000 had been exceeded by almost £1.2 million as a result of overspending by two of its arm's-length bodies - the Valuation Tribunal Service and the Commission of Local Administration in England.

Chairman of the Commons Public Accounts Committee Margaret Hodge described the failure of the department to control its finances as "a shocking example of incompetence".

"This is an unacceptable abuse and waste of public money that could have been avoided with the right financial oversight," she said.

"I am staggered that the department has been so blase with its resources and so poor at staying within some of its budgets.

"If local authorities, for whom the department is responsible, acted in this way, the department would be down on them like a ton of bricks. The Department for Communities and Local Government must learn lessons and ensure it does not repeat these mistakes."

A DCLG spokesman said: "The Annual report and Accounts for 2012-13 show the Department has an excellent record for saving money and has stayed well within the Treasury's overall spending limits. An administrative error by officials meant the Department went overdrawn for one banking night at the end of the financial year, but immediate action was taken to correct it and avoid any recurrence.

"This Government has stopped excessive and wasteful spending in the Department, delivering the largest savings in Whitehall, with administration spending down by more than 40% and the move to Marsham Street next year saving the taxpayer £9 million per year."