Budget cuts and inflated expectations of IT projects have lowered the quality of HMRC’s interaction with the public to unacceptable levels, according to the Treasury select committee.
In a report published today, Administration and effectiveness of HM Revenue and Customs, the committee says the evidence it has received in its inquiry had been “disturbing”.
It says: “HMRC’s delivery of services to the general public has fallen to unacceptable levels in several areas. May factors have contributed to this process: overly ambitious expectations for IT projects, sustained cuts in resources, a ‘command and control’ management culture, increasingly complex tax legislation and the legacy of the Inland Revenue and HM Customs and Excise merger”
According to a National Audit Office report published earlier this month, HMRC has reported £1.4bn of savings since 2005 and must reduce its running costs by £1.6bn by 2015, cutting 10,000 staff in the process.
The TSC report says: “We are particularly worried as there is no evidence the methods of management will deploy to find ‘efficiencies’ and ‘cost savings’ have changed in any substantial way.”
The report says HMRC must improve its record on the percentage of telephone calls it picks up and draw up minimum standards for how quickly it responds to postal queries to stop other parts of the system getting clogged up by people following up enquiries.
It adds that the flawed implementation of PAYE IT systems, has done “significant damage” to public perception of HMRC but that historically low service standards indicate it cannot be the sole cause. The report calls on the HMRC to work with professional tax bodies and charities to develop customer service indicators to help counter poor service.
The report says the ‘command and control’ management style is likely to harm staff morale leading to disengagement and poor performance, adding that the professionalism of these staff is vital to delivering improvements.