The Commons Public Accounts Committee (PAC) has published its report on ‘Quality of service to personal taxpayers and replacing the Aspire contract’ (see http://bit.ly/2auSXhG), which assesses HMRC’s customer service performance and management of its technology contracts since January 2015, when the committee last reported.
The 2015 spending review settlement committed HMRC to further costs reductions by 2019/20. HMRC plans to deliver these savings through digitising its services, which means it must persuade more taxpayers to use online services and reduce telephone enquiries and written correspondence.
As the NAO reported recently, HMRC underestimated the demand for telephone contact and reduced its staff numbers by 5,600, leading to a collapse in customer service levels in 2014/15 and early 2015/16. Average call waiting times tripled, transferring an unreasonable cost to taxpayers. Taxpayers spent some four million hours waiting for HMRC to answer the phone, incurring direct call charges while on hold, resulting in an estimated £4 in extra costs to customers for every £1 saved by HMRC on telephone services. Waiting times recovered towards the end of 2015 after the recruitment of 2,400 new staff.
The PAC warns that HMRC needs ‘a clear understanding of customer behaviour’ before implementing plans to cut the cost of its personal tax services by another 34% in the next five years. 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’. She added, ‘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’.
HMRC’s replacement of the ‘Aspire’ IT contract with Capgemini is central to its move towards a fully digital tax system by 2020. HMRC calculates that replacing Aspire will lead to annual savings of £200 million by 2020/21. In January 2015, the previous committee was concerned that HMRC did not fully appreciate the challenges it faced in trying to replace these services by 2017. The PAC notes that HMRC is now ‘better placed’ to manage the operational and technical risks, having adopted a phased approach to replacing Aspire services between 2015 and 2020, although the decisions taken over the next two years will be crucial.
The PAC makes six main recommendations:
HMRC must provide 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.
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.
HMRC should estimate the cost to those using its services, including factors such as charges incurred using the 0300 helpline and time spent waiting on the telephone. It should use this information when considering resource needs to ensure the optimal balance is struck between its own costs and those borne by customers.
HMRC must make significant progress in understanding and measuring the relationship between service quality and tax revenue, and report back to the Committee on how far it has got by the end of 2016.
HMRC must ensure continuity in the leadership of the Aspire programme to maximise its ability to design and introduce a new IT model successfully.
HMRC should update the Committee on progress at each key point in the Aspire programme.
The Commons Public Accounts Committee (PAC) has published its report on ‘Quality of service to personal taxpayers and replacing the Aspire contract’ (see http://bit.ly/2auSXhG), which assesses HMRC’s customer service performance and management of its technology contracts since January 2015, when the committee last reported.
The 2015 spending review settlement committed HMRC to further costs reductions by 2019/20. HMRC plans to deliver these savings through digitising its services, which means it must persuade more taxpayers to use online services and reduce telephone enquiries and written correspondence.
As the NAO reported recently, HMRC underestimated the demand for telephone contact and reduced its staff numbers by 5,600, leading to a collapse in customer service levels in 2014/15 and early 2015/16. Average call waiting times tripled, transferring an unreasonable cost to taxpayers. Taxpayers spent some four million hours waiting for HMRC to answer the phone, incurring direct call charges while on hold, resulting in an estimated £4 in extra costs to customers for every £1 saved by HMRC on telephone services. Waiting times recovered towards the end of 2015 after the recruitment of 2,400 new staff.
The PAC warns that HMRC needs ‘a clear understanding of customer behaviour’ before implementing plans to cut the cost of its personal tax services by another 34% in the next five years. 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’. She added, ‘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’.
HMRC’s replacement of the ‘Aspire’ IT contract with Capgemini is central to its move towards a fully digital tax system by 2020. HMRC calculates that replacing Aspire will lead to annual savings of £200 million by 2020/21. In January 2015, the previous committee was concerned that HMRC did not fully appreciate the challenges it faced in trying to replace these services by 2017. The PAC notes that HMRC is now ‘better placed’ to manage the operational and technical risks, having adopted a phased approach to replacing Aspire services between 2015 and 2020, although the decisions taken over the next two years will be crucial.
The PAC makes six main recommendations:
HMRC must provide 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.
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.
HMRC should estimate the cost to those using its services, including factors such as charges incurred using the 0300 helpline and time spent waiting on the telephone. It should use this information when considering resource needs to ensure the optimal balance is struck between its own costs and those borne by customers.
HMRC must make significant progress in understanding and measuring the relationship between service quality and tax revenue, and report back to the Committee on how far it has got by the end of 2016.
HMRC must ensure continuity in the leadership of the Aspire programme to maximise its ability to design and introduce a new IT model successfully.
HMRC should update the Committee on progress at each key point in the Aspire programme.
