The Public Accounts Committee (PAC) has published a report today into its findings on HMRC’s performance in 2014/15. From HMRC’s perspective, the report really does not make good reading.

Jolyon Maugham has already blogged on one aspect of that report (prosecution of offshore evasion) here and I have made a couple of comments. In doing so I felt the need to add a slightly different focus in this blog.

The PAC report identifies five criticisms (the report refers to them as conclusions) of HMRC performance – which doesn’t sound many but they are all pretty significant – and recommends specific action in each case. What comes over to me in reading this section of the report is that HMRC’s leadership seems almost impervious to criticism and determined to simply carry on as before. The problem is that HMRC is a non-ministerial department of Government and is, far all intents and purposes, self-regulating. Lin Homer seems quite content to turn up, sometimes with some of her lieutenants in tow, listen to the criticism, deny that there’s anything really wrong and then go back to the office and forget about it all. Well, that’s the way it appears to me.

Take as an example the third conclusion that the PAC reach in the report.

HMRC is still failing to provide an acceptable service to customers and could not tell us when it would be able to do so.

Frankly, this comment could cover a multitude of service issues within HMRC but the focus was actually on HMRC’s apparent inability to answer phone calls efficiently. Taking the numbers directly from the PAC report we see that HMRC answered only 74% of calls received in 2011/12 with that rate falling to 72.5% in 2014/15. In the first half of 2015 the rate has fallen even further to just 50%. Note that this is for calls answered, irrespective of how long the frustrated caller has been waiting. HMRC has a self imposed target of answering a paltry 80% of calls within five minutes – to be honest, I cannot believe many people would wait five minutes to speak with someone when calling any other organisation!

Despite that target, in 2014/15 HMRC actually managed to answer only 39% of calls within the five minute target. That’s right, almost two-thirds of all calls were still unanswered after five minutes.

Now, the numbers themselves are bad enough but it is the attitude of Lin Homer, HMRC’s Chief Executive and Permanent Secretary, that I find particularly infuriating. Consider these examples of her responses to specific questions.

Q4 David Mowat: We will leave this now, but just on a point of fact, the indicator is not “within five minutes”. I think the indicator of 80% is those calls that you answer at all. The five minutes is a different point. You are at 39% on the five minutes. Those that you answer at all is 73%. Letters is similar.

In your answers, you have given some good explanations, but you have not said that this is something, therefore, that we can expect to see addressed within x months. Is that something we can expect to see addressed within x months or by this time this year, or will it have got worse again?

Lin Homer: We are aiming to get better year on year, but I do not think it is sensible for us to give you a pat promise that it will be better. As I have said, the first four months of this year got considerably worse. We introduced a new telephony system that, long term, is a really good thing to do. We used to have a system where, when you queued, once the phone was answered, you dropped into one of our buildings—if you like, you physically dropped into one centre. We have put in place a telephony system that means that you queue in the cloud—for those who like the new language—so, while you are waiting, if one call centre gets busier than another, you still get answered in your turn. That is a really good thing for the medium term, but our performance worsened in the first half of the year. We are balancing strategic against—


Q5 David Mowat: Just to cut you off on that—we will leave this now—but your performance has worsened over the last two years in terms of the published numbers in the NAO Report.

Lin Homer: I don’t think it would be fair to say that they have in all respects, but we are still struggling—


Q6 David Mowat: Just in terms of the indicators that we are talking about, particular calls being answered.

Lin Homer: Yes, that has gone down slightly, but it is more consistent across the year.


Q7 David Mowat: When I said, “Could you tell the Committee a timeframe when it will be improved?” you said you were not willing to commit to that. I am just interested to know: have you asked that question of your people—you may not want to commit externally—within your organisation? Are people within HMRC working to a timetable to improve this that you know about and that you are managing?

Lin Homer: We have a very clear and strongly shared view—not just within personal tax, but across the organisation—that, year on year, we should be seeking to get better at customer service.

So, Lin Homer thinks it would be wrong to simply give a “pat promise that it will be better”. Why won’t she make that promise? It’s her job to ensure service improves, so is she saying that she can’t do it?

It gets worse, however; just look at the answers to these two questions.

Q8 David Mowat: Sure, but, for example, 39% of calls are being answered within five minutes. Have you had a dialogue with one of your reportees to say, “This isn’t good enough. I would like you to tell me when you or somebody in your organisation is going to get this fixed,” so, as somebody committed to customer service, your mind is put at ease?

Lin Homer: I discuss customer service pretty much every week—sometimes every day—with the director general, Ruth Owen, who has been here on previous occasions. Yes, it is completely at the top of her agenda, but I would just say again that we are focused on a balance of our performance indicators for customer service. We don’t believe that one of the many trumps all. The five minutes one was always an aspiration, and we don’t actually think it is the most compelling one.


Q9 David Mowat: Which is the most compelling one?

Lin Homer: The ones that we are particularly focusing on include having a consistent level of calls answered throughout the year. The year before last, we probably had our highest yearly answering—79% of all calls answered. None the less, in the last week of tax credit renewal we answered only 16% of calls. We said then—we still feel this is important—that if we can get close to the 80%, we would like that to happen day in, day out, not just in some quiet months of the year and in peak months. Consistency of call handling is one of the most important things. A second is that when you get through, we deal properly and well with your inquiry. That is something that we consistently score highly on already; protecting it remains important. For me, it is probably more important than a certain number being answered.

The PAC report sums this up rather neatly.

HMRC also told us that its most important aim was to provide a consistent level of service, rather than to hit the annual targets it has set.

Which begs one question from me – why bother setting those targets in the first place?

So what is to be done about all of this? In my view the PAC can criticise all it likes but two things are needed before any meaningful improvement will arise.

  1. Government needs to invest properly in HMRC so that it has the proper resources needed to do its job.
  2. HMRC needs proper leadership, someone who is prepared to stand up to the Government on resourcing and drive through the changes needed.