Examination of Witnesses (Questions 80-99)
Monday 15 December 2003
Mr Mike Eland, Mr Len Morris, and Mr Kevin Franklin
Q80 Mr Steinberg: By how many?
Mr Eland: We have changed the
way in which—
Q81 Mr Steinberg: By how many?
Mr Eland: About 3,000.
Q82 Mr Steinberg: Three thousand extra
people working now.
Mr Eland: The original contract
was signed on the basis that we would be declining in numbers.
It was due to go down to 18,000 and we are now 22,000.
Q83 Mr Steinberg: How did you get it
so wrong then?
Mr Eland: It was not a question
of getting it wrong. It was a question of change in policy which
brought those additional people in.
Q84 Mr Steinberg: You certainly did not
get it right because you have 3,000 extra people in.
Mr Eland: It was because of a
change of policy that we brought those additional people in, not
that we got it wrong. It was not that we got it wrong.
Q85 Mr Steinberg: If that is getting
it right, heaven knows what getting it wrong is like.
Mr Eland: We were working on one
set of plans when we originally signed the contract. Policy changes
since then have led to us expanding.
Q86 Mr Steinberg: So because you expanded
the number of staff, because you got it wrong in the first place,
it has cost the taxpayer something like £500 million. That
sounds pretty typical of the PFIs we have come to expect and love
in this Committee. I have to be a little sceptical about using
the internet anyway for banking issues or issues which have anything
to do with money and I certainly would not want to do it. In my
view, it is going to be a very difficult task to get people to
go on and do their VAT over the internet. What rather amused me
was that there is talk about making it compulsory to register
on the internet to pay your VAT, is that right?
Mr Eland: We will look at whether
we will make it mandatory in some areas or for certain sizes of
business.
Q87 Is it right that if they get it wrong
on the internet then they are penalised?
Mr Eland: No.
Q88 Mr Steinberg: It is what it says
in the Report.
Mr Eland: No. If you put in a
wrong VAT return, then we would take action against that whether
you did it manually or electronically.
Q89 Mr Steinberg: What happens if it
breaks down? What happens if somebody is putting in their VAT
return and the internet breaks down and they cannot get it in
on time?
Mr Eland: We would accept an alternative
routing.
Q90 Mr Steinberg: They would not be penalised.
Mr Eland: Not if it was not their
fault. Just recently with the postal strike we suspended penalties
because we knew people could not get their returns in.
Q91 Mr Steinberg: How many people do
you think are actually going to take it up eventually?
Mr Eland: We are looking to get
50% take-up by March 2006 and we would like to get something like
80% taken up by the end of 2010.
Q92 Mr Steinberg: Just remind us how
many have taken it up to now?
Mr Eland: Four thousand.
Q93 Mr Steinberg: Just remind us whether
it is working properly at the moment.
Mr Eland: We have not introduced
the new service on which we are basing our take-up strategy.
Q94 Mr Steinberg: How late is it?
Mr Eland: It is not; it is about
two or three months now behind when we had wanted to introduce
it, but that is because, in line with this Committee's own report,
we are taking the testing of these projects extremely seriously
and we are not going to inflict on taxpayers—
Q95 Mr Steinberg: What percentage of
take-up makes the investment worthwhile?
Mr Eland: Our business case is
based on us getting the 50% take-up.
Q96 Mr Steinberg: You have to get 50%
before it is worthwhile.
Mr Eland: Yes, I believe that
is so.
Q97 Mr Steinberg: It gets into profit
after 50%.
Mr Eland: That depends on whether
you are looking at the efficiency savings or the revenue. The
revenue is actually less sensitive to take-up. A lot of that is
about us getting the information to equip our offices. The efficiency
savings are dependent on take-up.
Q98 Mr Steinberg: Mr Allan asked about
incentives and you said you were thinking about incentives. You
do a lot of thinking, do you not, but you do not seem to do much
action? You are just thinking of incentives and the thing has
been going since 1999.
Mr Eland: No.
Q99 Mr Steinberg: You are just thinking
about incentives. I would have thought you should have been thinking
about incentives right from the beginning. What incentives do
you hope to introduce? How are you going to make somebody like
me, who has no confidence in the internet, not that it does not
work but have no confidence in myself being able to use it? How
are you going to persuade me that it is worthwhile sending in
a VAT form over the internet?
Mr Eland: We are going to offer
a business which wants to do that, a range of much better information
which they can get in a more accessible fashion. We are going
to offer them the ability to use search engines to find the answers
to questions quickly.
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