HM CUSTOMS AND EXCISE:APPROPRIATION ACCOUNTS MATTERS
1995-96
| FUNDAMENTAL EXPENDITURE REVIEWS AND THE SPEND-TO-SAVE INITIATIVE
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| C&AG's Report, paras 50 and 76
| 36. As a result of the Chancellor's 1996 Budget, the Department were implementing a "spend-to-save" initiative which would involve the re-deployment, in 1998-99, of 1,100 staff released from posts due to be saved under the fundamental expenditure review. Additionally, a further 350 staff were to be recruited, giving an overall increase of around 1,450 staff by the end of 1999-2000, compared with previous plans. The general thrust of the initiative was to strengthen counter measures to the activities of the least compliant traders, and to reinforce the Department's anti-avoidance effort. Some additional resourcing of investigation and intelligence activities was also planned.
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Qs 38 and 41
Q 48
Q 49
| 37. The Department told our predecessors that the negative effect on staff morale of the proposed reductions under the first fundamental expenditure reviews had, to some extent, been offset by the announcement of the redeployment of staff under the spend-to-save initiative. They acknowledged that this apparent change in direction came within less than 2 years of the original fundamental expenditure review proposals. They pointed out, however, that the review had been necessary to highlight areas of relative inefficiency, and provide Ministers with the option of either maintaining receipts of revenue with less staff or increasing revenue yield with existing staff deployed to greater effect.
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Q 53
Q 50
Q 12
| 38. The Department told our predecessors that the fundamental expenditure review had revealed that they had been putting a lot of resource into visiting, some of which was to compliant traders. The review had shown that this was not a sensible way of deploying resources. The Department agreed that there had been a positive cost benefit relationship between staff costs and additional revenues. In particular the spend-to-save initiative assumed that, on average, the work of an individual officer could provide additional revenues in the order of £1.5 million over three years. Once specific measures of the effectiveness of this redeployment were agreed they were to form part of the Department's Management by Outputs Agreement with the Treasury.
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Qs 55 to 57
Appendix A Evidence pp 17-18
| 39. Our predecessors asked whether the reduction in anti-drugs staff was justified, in the light of the apparent growth in the drugs trade. The Department confirmed that, in line with the initial fundamental review, there had been a reduction of 245 staff involved in anti-drugs work. These reductions had taken account of information provided by the fundamental expenditure review which showed that 50 per cent of detections had been made by 10 per cent of the staff. The Department said they were evaluating the impact of these reductions before seeking the decision of Ministers on whether to proceed with the second tranche of reductions. Intelligence staff had been increased by 50 as a result of the initial fundamental review, and were being further increased by 273 as a result of a separate Investigation and Intelligence review. The evaluation presented to Ministers confirmed that the first round of staff reductions had not had an adverse effect on results. It highlighted, however, the increased threat from international drug smuggling and the consequent risks associated with proceeding with the second tranche of staff cuts. In July 1997, Ministers announced that, in the present circumstances, it would not be prudent to proceed with any further reduction in anti-smuggling posts.
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| Conclusions |
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| 40. We note that the Department's fundamental expenditure reviews identified that a proportion of visits to traders, to assess compliance, had been an ineffectual use of officers' time. We also note that the spend-to-save initiative is intended to redeploy such time to greater effect. We expect the Department to be able to show, in due course, that the forecast addtional revenues resulting from this improved deployment have been achieved.
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| 41. We note the Department's confirmation that the reduction of 245 staff involved in anti-drugs work did not adversely affect the results of this work and we welcome the decision not to proceed with further cuts at this time. We acknowledge the Department's difficulty in estimating the value of the drugs market, despite the availability of qualitative information. Nevertheless, we are concerned that sufficient priority should be given to tackling drugs, and we recommend that decisions regarding the staffing of anti-drugs work continue to take full account of the threat.
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