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02.12.16

MPs warn HMRC cuts could lead to ‘disastrous’ customer service decline

A new report by the Public Accounts Committee (PAC) has cast significant doubt on HMRC’s ability to safely cut staff and funding, given the failures of previous reforms.

The ‘HM Revenue & Customs performance in 2015–16’ report warned that HMRC “faces an enormous challenge” in balancing its plans to reduce spending, replace Aspire with a new IT programme, cut 34% of its staff in the next three years, and close over 90% of its offices.

The committee stated that HMRC has no contingency plan for what to do if it was not able to make up for the staff cuts with an increased number of customers transferring to digital services, despite the fact that previous workforce reductions in 2015 caused call waiting times to triple.

Meg Hillier MP, chair of the PAC, said: “HMRC's senior management cannot afford to be complacent about the catastrophic collapse in customer service in 2014–15 and the first half of 2015–16, nor about what is at stake should their projections about demand for call centres prove wrong.”

The committee demanded that HMRC report to it by March 2017 to prove that it has a credible plan to make savings without damaging customer service, and that it has agreed a contingency plan with Treasury should its projections prove to be inaccurate.

Mark Serwotka, general secretary of the PCS, which is campaigning against the office closures, said: “There is now an overwhelming case for these plans to be halted to allow for a proper public debate and parliamentary scrutiny of the kind of revenue collection service we need and the staff and resources it will take.”

Mark Dearnley, HMRC’s chief digital and information officer, announced his resignation in August. PAC added that there was a risk of losing further key staff to the private sector, which would damage HMRC’s ability to deliver change and manage the risks of the IT handover.

An HMRC spokesperson said: “We now consistently answer 90% of calls first time, in an average of less than five minutes. We have invested heavily in customer services, recruiting more than 3,000 new staff who are also available outside normal office hours when many of our customers choose to call us.

“This is alongside a new range of popular digital channels for customers to get the information and support they need without having to pick up a phone or pen.”

The report was also deeply critical of HMRC’s handling of the contract for Concentrix to handle tax credits claims, which was cancelled after it emerged the company was failing to answer calls on time and trying to unfairly deny claims.

However, the contract was not cancelled until October despite the PAC raising concerns in June. The MPs urged HMRC to learn the lessons from this episode promptly and ensure it has clear customer service standards whether a service is delivered in-house or by a contractor.

The Work and Pensions Committee released a separate report into Concentrix yesterday. It said that the company treated claimants as “guilty until they could somehow prove themselves innocent”.

It also found that HMRC was negotiating the renewal of Concentrix’ contract as little as four days before it announced it was to be cancelled.

Frank Field MP, chair of the Work and Pensions Committee, said: “Although the committee welcomes HMRC’s decision to bring in house its tax credit compliance functions, we are clear that this will not automatically deliver a better service.

“Nor are those families driven into debt going to be rescued from the plight into which this sorry episode plunged them.”

Furthermore, the PAC accused HMRC of “painting too rosy a picture” of its efforts to tackle tax evasion, and said it should gather better data on how well its efforts are working.

Taxpayer complaints to HMRC are also increasing. There were 80,400 in 2015-16, compared to 74,400 last year, and an average of 85% of those referred to the tax adjudicator were upheld. The PAC recommended that HMRC review the complaints it receives and its complaints procedures, in order to reduce the overall numbers of complaints and referrals.

(Image c. Joe Giddens from PA Wire and Press Association Images)

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