HMRC chief Lin Homer: "unengaged" staff need to feel more involved in our future

HM Revenue and Customs chief executive says low staff morale is not damaging productivity – but acknowledges more work to do to make officials feel engaged with wider department

By matt.foster

10 Nov 2015

HM Revenue & Customs (HMRC) must do more to ensure that "challenging and unengaged" staff feel that their "voice is being heard", the tax authority's chief executive has said.

The 2015 civil service people survey is expected to be published in the next few weeks. Last year's figures showed that staff engagement at HMRC lagged 16 points behind the civil service average, while only 28% of staff felt the organisation was well-led. That score – for leadership and managing change – was 15 points below the government average.

Appearing before MPs on the Treasury committee on Tuesday, Homer was questioned on whether low morale may have contributed to customer service failings identified in a highly-critical recent report by the separate Public Accounts committee.

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Homer acknowledged that morale had been a long-standing problem for her organisation – but insisted steps were being taken to improve the situation.

"Employee engagement has risen over the last five years from a low of 34% to 43% last year," she said.

The HMRC chief said that there was "definitely something" about the department's "psyche" that meant its staff were "not as engaged with public service" as were their colleagues in other government organisations.

But she said there was "no evidence that they are less productive or less committed to the job that they do".

Homer added: "It is extraordinary how people will absolutely offer a higher dissatisfaction [level] with public sector pay than any other department, a higher level of dissatisfaction with change, with senior management – but when you ask them about their work, their confidence about being able to do it well and their commitment to do it well they are up at the same levels as the other departments."

"Whole business"

Last week's PAC report accused HMRC of having made "little or no progress" in tackling tax evasion, and accused it of "still failing to provide an acceptable service" to customers. 

The department hit back, however, saying the committee had "overlooked" its key achievements, including increasing tax take and narrowing the tax gap. 

Homer acknowledged that HMRC had suffered an "unintentional dip" in customer service performance over the past year. But she said the department was now "getting more adept at giving people what they need" – including by hiring more customer service staff and focusing on improving online services.

And the chief exec said that, in spite of morale being low, her staff had made progress on several fronts.

"We’ve taken a significant amount out of our budget in efficiency during that period [2010-15]. We’ve delivered significantly more for less. We’ve continued to narrow the tax gap from over 8% to 6.4%. We’ve halved fraud and error from tax credits from 8.8% to 4.4%. So yes, they are productive whilst being challenging and unengaged."

She said the department had spent two years trying to improve morale by holding "face-to-face" discussions between staff and senior leaders, with HMRC encouraging officials to look beyond the specific part of the organisation they work for.

Homer told MPs: "I could visit an office and talk to enforcement and compliance people on floor four who would be suspicious of their business tax colleagues on floor five. And they would wait for me to visit to raise that. I would say ‘Have you ever thought about walking up the stairs and talking to the business tax colleagues?’"

"So we think there’s a lot for us to do to really get for them to understand that we want for them to have views. We want them to care about the whole business and to try and ensure that they can see that when they make suggestion and comments that we put them into effect."


Homer was asked by committee chair Andrew Tyrie whether she felt HMRC was "staffed by large cohorts of Eeyores" who complained "bitterly" about their work but then performed well.

"I will put up with them complaining for the levels of performance they deliver," the HMRC chief replied.

"What I would like to feel – and we’ve been working really hard at over the last two or three years – is that they would genuinely feel we want to engage them more in the choices we’re making about the future. Because I think they were doing their job, [but] they were not feeling involved. And therefore they were feeling detached from this." 

Spending Review

The HMRC chief was also questioned on the forthcoming government-wide Spending Review.

As an unprotected government department, the tax authority has been ordered by chancellor George Osborne to model further cuts to its resource spending of both 25% and 40% by 2019-20.

Homer said the taxman would know the result of its talks with the Treasury "fairly soon" – and pointed out that HMRC had become adept at reducing its running costs in recent years.

"We are in a slightly unique position, I think, in that in my time in the department it also feels like we’ve been having a spending review every six months," she said.

"So every fiscal event is an opportunity, I believe, for HMRC. And we usually get some more work. But if we’ve got good ideas on those occasions we often get more investment as well.

"What we’re looking to do is to have a sustainable plan for delivering really good tax in as good a way as we can at the least cost we can for the country because, after all, there are other things to spend taxpayers’ money on."

Asked whether HMRC would welcome funding stability rather than “continual year-by-year cuts”, the tax authority's chief executive joked: “I’ve worked in the public sector for 38 years. I yearn for the period of stability I’ve never had.”

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