Report: MPs worried about performance at Revenue and Customs

09 March 2010

The Treasury Committee today releases its report 'Administration and Expenditure in the Chancellor’s Departments 2008-09', as part of the Treasury Sub-Committee’s regular scrutiny of HM Treasury and its associated bodies

The Chancellor’s departments faced extraordinary challenges during 2008-09, mainly arising from the need to respond to the emerging financial crisis and associated economic downturn. The report concludes that it is very difficult to draw final conclusions regarding their level of success – too much remains unfinished business.

It draws attention, in particular, to the new relationship between the Treasury and UKFI, and recommends that the Government considers whether the formal terms of the relationship need some re-definition in the light of experience. It also notes that the Treasury needs to guard against staff burn-out and over-stretch.

The report is particularly concerned by the dire results for HM Revenue & Customs (HMRC) of a cross-Government staff survey pilot study conducted in February 2009, which ranked HMRC against the responses of staff in ten other Government Departments.

Out of a total of 67 ranked questions, HMRC is ranked last, or next to last for 53 questions. Only 11 per cent of HMRC staff felt that change was well managed in HMRC. The employee engagement score was 32 per cent - 16 per cent lower than the median score across the 11 Government departments.

The Report calls for HMRC management to publish a clear and detailed plan to provide focus and direction to their efforts to re-engage with their workforce. Noting a rise in customer complaints and that, on average, only 57 per cent of calls to HMRC contact centres were answered during 2008-09 – including a low of 33 per cent during the peak July period – the Report urges HMRC to improve customer experiences.

It also calls for HMRC to publish more data to enable effective scrutiny of its performance against its targets, data which is essential for tax gaps to be closed and for the take up of the working tax credit to be assessed and improved.

Sub-Committee Chairman Michael Fallon said:

"Given the extraordinary measures the Treasury and its associated bodies for the period have had to take over 2008-09 in the wake of the financial crisis and subsequent recession – many of which remain ongoing business - it was very difficult to draw final conclusions regarding the level of its 'success.'

"The relationship between the Treasury and UKFI in particular remains work in progress – and we call on the Treasury to clarify the lines of demarcation.

We are particularly alarmed by the low of staff morale and engagement at HMRC, and its effect on performance. We are deeply troubled by the apparent absence of any plan to ameliorate the situation, and call on HMRC management to re-double their efforts here."

HM Treasury

The Report is critical of the failure of most departments to provide accurate and timely monthly in-year figures to the Treasury. It queries the Treasury’s "met-ongoing" assessment of performance against its low inflation target, given that the target was missed eleven months out of twelve during the period.

The Report further notes that the Government will fall well short of its PSA target to halve the numbers of children living in poverty by 2010-11. It therefore reiterates a recommendation that the Government clearly sets out the steps it proposes to take to move nearer the target in the time available and to achieve the eradication of child poverty by 2020.

Ports Revaluation

Having been told previously that Ministers would meet with port operators to discuss some of the issues arising from the Valuation Office Agency’s revaluation of UK statutory ports, the Committee was dismayed to learn that this has not occurred. The Report recommends that the Government urgently reviews the impact of the revaluation on port occupiers, and publishes its findings.

National Insurance and Savings

We recommend that the Government considers whether there is a wider public interest in retaining stronger links between the Post Office and National Savings and Investments (NS&I).

The Royal Mint

The report notes that the Royal Mint only returned to profitability in 2006-07, and positive future performance – now as a Government-owned company – cannot be taken for granted.

Image: PA

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