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HMRC warned over 34% staff cuts despite call rate delays

Plans by HM Revenue and Customs (HMRC) to cut its personal tax staff by 34% by 2020-21 could lead to a return of the long delays on the phone customers experienced earlier this year.

HMRC cut 5,600 staff in 2014-15, hoping to make up for the shortfall with a transfer to more digital services. However, call rates from customers remained the same, and waiting times tripled because there were not enough staff to answer them.

A new report from the Public Accounts Committee (PAC) said that HMRC must test whether its expectations of increased customer transfers to digital services are realistic before they are widely implemented, and be prepared to deploy enough staff to meet demand.

Meg Hillier MP, chair of the PAC, said: “The prospect of HMRC making further cuts to spending on customer service will chill the blood of many taxpayers.

“HMRC's recent performance in this area has been appalling for long periods and left members of the public counting the cost in time and money. It is bad enough that people trying to pay their fair share of tax should have been kept waiting for so long.

“But holding for HMRC’s helpline has hit them in the pocket too – a serious concern for those on low incomes and a dismal message to send to small businesses, the self-employed and anyone else simply seeking advice.

“HMRC has serious work to do before this Committee is confident it can provide a consistent, efficient service that properly meets the needs of taxpayers and optimises tax revenue.”

When he appeared before the committee as part of the inquiry, Jon Thompson, chief executive of the HMRC, admitted that although customer service had recovered, the transition to digital remained “a significant strategic risk”.

The PAC also found that HMRC does not have an adequate understanding of the impact of the customer service it provides on tax revenue, although it estimated that it might be able to raise an additional £43m by improving services.

It said that HMRC must improve its understanding of the issue, and report back on the progress it has made by the end of the year.

Warning issued over IT systems change

HMRC is also in the process of introducing Capgemini as its IT systems provider, replacing Aspire. The programme has been rated ‘amber/ red’ by the Infrastructure and Projects Authority.

The PAC said that it was pleased to see HMRC adopting a staged process for introducing the new contract between 2015 and 2020, which it said should reduce the risks.

However, it noted it was concerned that HMRC would struggle to integrate different services from different providers and asked to be updated regularly on its progress.

Mark Serwotka, general secretary of the Public and Commercial Services Union, called for the job losses programme to be halted, adding: “The government must give HMRC the resources it needs, or we will just see repeats of these problems for years to come.”

An HMRC spokesperson said: “The PAC is well aware our phone lines have since fully recovered and we are now offering our best service levels in years. Wait times are now below five minutes and customers consistently rate the support they receive on the phones as excellent.”

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