HMRC customer service ‘collapsed’ because of badly timed staff cuts

Customers to HM Revenue and Customs (HMRC) were forced to wait much longer on the phone after the service cut staff numbers, a new National Audit Office (NAO) report has found.

The report says that in order to deliver £257m savings, HMRC reduced personal tax staff from 26,000 to 15,000 in 2010-15, hoping to make up the shortfall with increased digital services and automated telephony.

However, the demand for phone services did not fall, and after 5,600 staff were sacked in 2014-15, average waiting times for calls tripled in the first seven months of 2015-16. The longest average waiting time, for self-assessment callers during the deadline week for paper returns in October 2015, was 47 minutes.

Amyas Morse, head of the NAO, said: “HMRC’s overall strategy of using digitally enabled information to improve efficiency and deliver service in new ways make sense to the NAO. This does not change the fact that they got their timing badly wrong in 2014, letting significant numbers of call handling staff go before their new approach was working reliably. This led to a collapse in service quality and forced a rapid expansion of headcount.

“HMRC needs to move forward carefully and get their strategy back on track while maintaining, and hopefully improving, service standards”.

As a result of the staff cuts, HMRC managed to meet its target of answering 80% of calls in only 10 weeks of 2014-15, and the average amount of calls answered fell to 71%.

Mark Serwotka, general secretary of the Public and Commercial Services Union, said: “HMRC is a textbook case of how good quality public services need investment not more cuts, and how austerity all too often ends up costing more than it saves.”

The NAO estimated that the overall cost incurred by customers who have called the taxes helpline increased from £63m in 2012-13 to £97m in 2015-16.

HMRC tried to reduce costs to customers by reducing the cost of its calls, but this was offset by the longer length of calls.

An NAO survey of customers using HMRC services found 58% rated the service as good or excellent, 21% as average and 21% rated it as poor or terrible, with satisfaction at its lowest among phone customers.

To meet the growing demand on services, it had to transfer staff back to its call centres, meaning that the backlog of outstanding discrepancies in tax records requiring investigation rose from 2.4 million in March 2014 to 4.6 million in March 2015, of which 3.2 million were high-priority cases, meaning that customers may have ended up paying the wrong tax.

Ruth Owen, HMRC’s director general for customer service, said: “We recognise that early in 2015 we didn’t provide the standard of service that people are entitled to expect and we apologised at the time. We have since fully recovered and are now offering our best service levels in years.

“Over the past six months we’ve consistently answered calls in an average of less than six minutes, and have launched new online tax accounts and webchat for everyone, enabling customers to manage their tax affairs wherever and whenever they want.”

The NAO recommended that the HMRC learn the lessons of the failed efficiency programme by ensuring that it conducts a better assessment of the impact of spending decisions on its ability to meet targets and on its customers.

The HMRC was also criticised in a Public Accounts Committee report last month for failing to do enough to prosecute tax evaders.

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