COMMONS

Report published on charges for customer telephone lines

11 November 2013

The Public Accounts Committee publishes its 27th report on charges for customer telephone lines.

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said:

“Customers of Government services should be able to contact those services easily and cheaply. Charging customers higher rates by making them use 0845 or other high rate numbers is not acceptable, especially when the customers are often vulnerable people.

“We found that 1/3rd of customer telephone lines across Central Government used higher rate numbers. Half of those lines serve the poorest people. Customers spent an estimated £56 million on calls using higher rate numbers, from the lines run by the Department for Work and Pensions, to helplines for victim support and the Bereavement Service and the inquiries and complaints line of the Student Loans Company.

“The Cabinet Office has not played a role in establishing clear principles for charging. We welcome its commitment to do so urgently and it should then ensure those principles are met across Government. We also welcome DWP’s commitment to phase out the use of 0845 numbers for its customers. There should be low cost alternatives for all services used by a lot of vulnerable people.

“Callers must be informed of the costs involved in calling a particular number. Costs to callers can be even higher when they are left waiting to speak to someone. Performance by departments varies but is often astonishingly bad. HMRC managed to answer only 16% of the calls it received on its tax credits helpline on the deadline day for notifying the department of changes of circumstances.

“The industry benchmark is to answer 80% of calls in 20 seconds but most departments do not have such a target and their performance falls wide of accepted industry standards. Citizens should not as a matter of principle have to put up with standards of service from government which are significantly worse than industry standards.

“Departments do not know how much money the suppliers of the higher rate lines are making from higher rate numbers. More transparency and benchmarking information is needed if departments are to negotiate with suppliers from a position of strength.”

Margaret Hodge was speaking as the Committee published its 27th Report of this Session examined the charges that people are paying to call government customer telephone lines.

In 2012–13 central government handled at least 208 million telephone calls. The Department for Work and Pensions received 100 million calls and HM Revenue and Customs received 68 million calls. Some 63% of calls to central government were to higher rate telephone numbers.

The estimated cost to callers of these calls in 2012–13 was £56 million. Callers to higher rate lines paid £26 million in call charges while waiting to speak to an adviser. Costs of phone calls using 0845 or other higher rate phone numbers hit the poorest the hardest, particularly because they are most likely to be using mobile phones where the charges are even higher.

Departments do not have a clear idea of the extra revenue generated from higher rate numbers. Despite Cabinet Office guidance, departments do not monitor the call revenues that third party providers receive.

A piecemeal approach by departments to customer telephone lines has produced a confusing and inconsistent system for charging callers. The Cabinet Office admitted that it has played no role in monitoring or co-ordinating government telephone lines since it last issued guidance in 2010, which departments appear to have ignored.

In March 2013, 120 of the 365 customer telephone lines across central government (33%) used higher rate numbers, 205 used less expensive geographic or equivalent numbers and 40 were Freephone numbers. The amount callers pay for calls to these different types of telephone line varies significantly, depending on whether they are called from a landline or a mobile, the caller’s telephone contract, and whether the caller has any free minutes available.

The Department for Work and Pensions is the only department that consistently uses automated messages to warn callers to higher rate lines serving vulnerable groups of the cost of calls. The Cabinet Office recognises that the current situation is unacceptable and told us that it had recently established a working group that would prepare new principles for telephone use within six to eight weeks of our hearing.

Recommendations

Recommendation: The Cabinet Office must urgently establish clear principles on charging for telephone calls, providing access to low cost alternatives to high rate numbers particularly for services accessed by vulnerable people and informing callers of the costs involved. These principles should also apply to arms-length bodies (like the Student Loans Company) and private contractors delivering public services. The Cabinet Office must also set out how application of these principles will be monitored and enforced in practice.

Higher rate telephone lines have a disproportionate impact on vulnerable and low-income groups who are deterred from calling, limiting access to essential services. Research by Citizens Advice has found that people are deterred from calling government telephone numbers over worries about the costs involved.

We are concerned that 59 of the 120 higher rate phone numbers used by departments are for telephone lines that serve vulnerable and low-income groups. These include a Victim Support helpline, the inquiries and complaints lines of the Student Loans Company, and 35 lines run by the Department for Work and Pensions, including the Bereavement Service helpline.

Higher rate 084 numbers are usually more expensive than geographic number types (such as those with 01, 02, or 03 prefixes), particularly where a mobile telephone is used. Even some of the 40 Freephone numbers used by departments which are free to call from landlines are currently chargeable on mobile telephones. This particularly affects low-income groups who tend to rely on mobile telephones.

We welcome the Department for Work and Pensions’ commitment to provide alternative 0345 numbers for callers using mobile phones to their 0845 numbers (which they will also retain as they are cheaper for some callers using landlines) and look forward to hearing about the prompt implementation of this change.

Recommendation: The Cabinet Office should mandate that telephones lines serving vulnerable and low-income groups should never be charged above the geographic rate and ensure that 03 numbers are available for all government telephone lines within 6 to 12 months, prioritising any which predominantly serve vulnerable and low-income groups.

Customer service levels are unacceptable and calls take too long to answer. The industry benchmark is to answer 80% of calls in 20 seconds, but most departments do not have such a target.

The Department for Work and Pensions reports that it has cut the average time spent waiting for a call to be answered to its 0845 numbers from four minutes 12 seconds in 2012¬–13 to one minute 44 seconds in the first quarter of 2013–14.

Over the same period the proportion of calls answered within 20 seconds has increased from 23% to 54%, a substantial improvement but still significantly below the industry benchmark.

The performance of HM Revenue and Customs is considerably worse, with an average waiting time for calls to be answered in the first quarter of 2013–14 of about seven minutes. Astonishingly, the Department only managed to answer 16% of the calls it received to its Tax Credits helpline on 31 July 2013, the deadline-day for notifying changes of circumstances.

Recommendation: The Cabinet Office should establish the principle that public service performance is always measured against industry standards of customer service. Departments should be required to publish on an annual basis their performance against industry standards and where there are shortfalls set out what steps they are taking to improve service levels.
Departments’ arrangements with telephone service suppliers lack the transparency needed to demonstrate whether value for money is being achieved. None of the departments reviewed by the National Audit Office kept actual revenue from higher rate telephone lines, but it is common practice to receive a deduction in the cost of other services instead.

Departments do not know how much money the telephone suppliers make from using higher rate lines. Departments cannot negotiate from a position of strength without open book arrangements and comparable benchmarking information within government. Fewer than half of telephone lines have the data needed to assess telephone line performance.

Recommendation: The Cabinet Office must require open-book arrangements for all government contracts where suppliers generate extra money from higher rates. Contracts should require a consistent set of metrics so performance levels can be compared. The Cabinet Office should establish transparent benchmarking arrangements to help departments achieve value for money.

Further information

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