HMRC's Ruth Owen: job cuts won't lead to fresh customer service "collapse"
HMRC's customer service director general says she is "confident that what the Public Accounts Committee are suggesting won't happen"
HMRC's customer service chief, Ruth Owen, has rejected a claim by MPs that the tax authority's plan for fresh job cuts over the next five years could lead to "another collapse" in customer service levels.
The tax authority reduced the number of staff working in personal tax from 26,000 to 15,000 during the last parliament, with HMRC arguing that it could cut demand from the public for direct contact by bringing in new automated phone systems and paperless self-assessment.
However, the latest report from the influential Public Accounts Committee (PAC) says that demand for HMRC's telephone advice "did not fall" as expected when it shed 5,600 personal tax roles in 2014, with the staff reductions leaving customers hanging on the phone for more than half an hour at a time. And it warns against making further staffing cuts without a "realistic" assessment of what those reductions will mean for customer service.
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The committee finds that average waiting times for HMRC's personal tax line peaked at 34 minutes in October 2015, while customers seeking help with self-assessments were kept waiting, on average, for 47 minutes.
The committee says HMRC "released too many staff too soon because it was over-optimistic about how quickly the demand on its call centres would fall".
In response to the 2015 delays, HMRC took on 2,400 new staff to man its helpline, a move which the committee says did allow the tax authority to "recover customer service performance", with average wait times standing at less than six minutes as of April and May this year.
"HMRC must test whether its forecasts of demand are realistic and be prepared to flex its resources as necessary to ensure service demand is met" – Public Accounts Committee
But PAC says HMRC must do more to ensure it provides "an acceptable and consistent level of service to customers that ensures all calls are answered promptly and dealt with effectively".
"HMRC should set out what level of service it is seeking to provide in the short term and its plans for improving this in the longer term, with a timetable for doing so," the committee says.
And the MPs add: "HMRC must test whether its forecasts of demand are realistic and be prepared to flex its resources as necessary to ensure service demand is met. HMRC should pilot how taxpayers will respond to new digital services before they are widely implemented."
Owen, HMRC's director general for customer service, on Wednesday acknowledged that calls had not been answered "quickly enough" in 2015 – but she insisted that the tax authority had engineered a big improvement in performance since then.
"I'm pleased to say that over the last nine months we've really turned that around and we have reported to parliament and the National Audit Office about this," she told the BBC.
"We are now offering our best levels of customer service and offering a very good online service too." HMRC agreed to make a further £1.9bn in cumulative savings by 2020 as part of last year's government-wide Spending Review, with £717m of that coming from "sustainable" departmental resource savings.
"We have better, phased contingency plans in place to make sure we still offer really good services" – HMRC's Ruth Owen
According to PAC, that left HMRC seeking savings of 20% in the final two years of the Spending Review period alone. But Owen said she was "confident" that the way the latest round of cuts had been phased in meant that the committee's warning of another big dip in customer service levels "won't happen".
"We know as a publicly funded organisation we have to be as efficient as we can be – that's how you keep taxes down," she said. "And we know in the next five years we will have to make an efficiency of about 6% a year. I think that's a fairly reasonable ask of a big organisation and we've got our plans already in place for the next five years."
She added: "We're confident that what the Public Accounts Committee are suggesting won't happen because we have better, phased contingency plans in place to make sure we still offer really good services."
Owen pointed out that HMRC had "significantly improved" customer service levels over the last five years.
"The department must now halt the reckless plans it has to slash more jobs and close all but a handful of its UK offices" – PCS general secretary Mark Serwotka
"At the beginning of the last parliament we were only answering about 48% of our calls," she said. "We're now answering 90%."
But, launching the report, PAC chair and Labour MP Meg Hillier said HMRC still had "serious work to do" before her committee could be confident that the tax authority could offer a "consistent, efficient service that properly meets the needs of taxpayers and optimises tax revenue".
She added: “Efforts to meet government spending targets must not come through ill-conceived measures that effectively penalise the people departments are intended to serve.
“HMRC says it now expects average waiting times to fall below five minutes and aims to reduce this still further. We will be holding senior officials to account on this target in the months ahead.”
Meanwhile, the Public and Commercial Services (PCS) union seized on the committee's report to reiterate its warning against further HMRC job cuts.
"We have told successive governments that cutting HMRC staff was damaging to services and counter-productive so it is simply staggering that MPs are still having to warn about the consequences," PCS general secretary Mark Serwotka said.
He added: "The department must now halt the reckless plans it has to slash more jobs and close all but a handful of its UK offices, and the government must give HMRC the resources it needs, or we will just see repeats of these problems for years to come."
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