Many government departments do not properly understand or use commercial accounting and budgeting techniques, a Commons committee says today.

A year ago, only 40 per cent of departments' finance directors were qualified accountants, the public accounts committee found.

In contrast, over 80 per cent of FTSE100 finance chiefs are qualified accountants.

Edward Leigh, the committee's chairman, said: "Departments now have highly developed mechanisms to help them use their resources more productively. But many are not yet using them properly."