Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 120-139)

MR DAVID VARNEY, MR PAUL GRAY AND MISS SARAH WALKER

12 OCTOBER 2005

  Q120  Susan Kramer: Looking at the corporate responsibility committee you have set up internally, I notice you do not have a disability champion, and I wonder what you are going to do about disability. You will be conscious of the fact that many disabled people are part of the tax credits system.

  Mr Varney: Absolutely.

  Q121  Susan Kramer: There is a feeling out in the field that many of your people are willing to try to be responsive to those who have a disability but they do not have the training or expertise or technical knowledge to do so. There is concern about the absence of a champion. You probably know the language in some of the tax legislation which is so outdated in its definition of incapacity. I do not want to repeat that here, but it has not yet been brought into line with the Disability Act. Are you considering putting in a champion for disability issues, looking both internally and externally?

  Mr Varney: We are considering the best way of improving our performance in diversity. I took on the role of diversity champion. We have more disabled staff as a percentage than the Cabinet Office target. I am not celebrating: that is what we have. And you are absolutely right: we deal with a community which has people who are disabled; we need to make our services accessible and available to people with disability. Our performance in terms of women and black minority ethnics is not as good as it should be and we are working hard to improve that in the feeder grades, but the specific arrangements we make for how to get these issues to get the focus is one on which we are debating what the right thing to do is. We have participated in the corporate responsibility index; we were the first government department to benchmark ourselves against Business in the Community's private companies. We came in at 97—so we were in their top 100—and we were seventh out of all the public sector organisations in the Race for Opportunity benchmark. So we are keen to benchmark ourselves. We are keen to improve. I would be the first one to admit there is a lot more to be done.

  Q122  Susan Kramer: In terms of your client base, do you have any concerns about someone taking specific responsibility to look at that? Again, the language within some of the legislation, which would shake us up today, is so inappropriate that it seems something more systemic is required.

  Mr Varney: Yes, I have every sympathy with that. I have just recruited three non-execs to the board of HMRC: two of them have visual impairment. That was not because we went out looking for people with disability; it was because we went out looking for talented people and these were the most talented people we could find. They will bring, I think, an added focus on this issue in the boardroom.

  Q123  Susan Kramer: Perhaps I could follow up by letter, to try to find out what you do with the community on the ground.

  Mr Varney: I am happy to do that. We have scored our website in terms of accessibility. We have tried to proof a number of the visiting sites. I am happy to receive your letter and I am happy to reply.

  Q124  Chairman: Perhaps you could let us have a letter on what you are doing in that area.

  Mr Varney: Okay.[6]


  Q125 Kerry McCarthy: On the issue of diversity, the Cabinet Office has set fairly challenging targets for 2008. Are you trying to meet the same targets?

  Mr Varney: Yes. We start behind in terms of women. Their target is 35% and we are somewhere around 20/22%, so we have a long way to go—and that is in the SCS, the senior civil service. The position is more encouraging if you look at fast streamers. We have gone from a position in 2001 where 14% of our fast streamers were women. This year, 69% of our fast streamers were women. We may have succeeded to excess. But we have to change the nature and makeup of the organisation. On black minority ethnics we have a target to get us up to 3.2%. I would say we are somewhere around the 1.7/1.8%, so we have a lot of work to do. But fast streamers is encouraging. About 10% of the fast streamers coming in are black minority ethnic and we are running summer schools to try to explain what we get up to, what our business is and that it is a great place to come and work and to make a contribution to the society.

  Q126  Kerry McCarthy: That sounds like good news.

  Mr Varney: It could be better.

  Q127  Kerry McCarthy: The previous head of Revenue was responsible for diversity issues across the civil service. Is that what you mean?

  Mr Varney: No, I have done it internally. I fully salute Nick's achievements in what he has done across the service, but I have spent the last year absolutely determined to get this business delivering what it is supposed to deliver while we do the merger. It has been my preoccupation.

  Q128  Jim Cousins: Of the 16,000 job cuts you are aiming at, how many will be in the field of tax credits?

  Mr Varney: I do not know. Our target which was set for us in the Spending Review was 16,000 gross and 12,500 net. 3,500 will be deployed to front line services, so it is 12,500 reduction. Now we have the organisation up, we are looking to see in detail what are plans are. We will look at the areas in which we can make savings and deliver the customer service. We have to deliver a customer service that is expected.

  Q129  Jim Cousins: So you do not know where the 12,500 net job cuts are coming from. Can you tell me how many of them you plan to be in the field of tax credits?

  Mr Varney: No. We have so far saved about 2,300 jobs.

  Q130  Jim Cousins: Can you tell me how many people who work in the field of tax credits work overtime?

  Mr Varney: I cannot personally.

  Mr Gray: I cannot give you a figure. We can let you have that figure.

  Q131  Jim Cousins: Could you let us have that figure and let us know whether the figures are going up or down.

  Mr Gray: Sure.[7]


  Q132 Jim Cousins: In the Ombudsman report, there is an indication that the number of people dealing with complaints in tax credits had more than doubled in a year.

  Mr Varney: Yes, we move people around to where we have problems. That is what we have done. We have prioritised. I have to make priorities, so I move people from one place to another. Yes, we move people into new tax credits to do this. The target that we have been set is by 2008. We have been describing to you earlier on our commitment to try to improve the efficiency and effectiveness of new tax credits in its delivery. As we become more efficient and effective, we would expect to look at that service to see what is the right size for it, what is the right sort of people base in it. It is not just a case of throwing bodies at it. It is competent, trained people operating an IT system which works well.

  Q133  Jim Cousins: I would expect you to know, in a field that is heavily overstressed like tax credits, what the level of overtime is and whether that is going up or down. I would have thought that was basic management information.

  Mr Varney: It is basic management information.

  Q134  Jim Cousins: The basic management information you have there does not include something as significant as what the levels of overtime are in a field like tax credits or whether they are going up or down.

  Mr Gray: Right. I assume that the basic point you are getting at is to what extent we have put additional resource into seeking to resolve the difficulties around tax credits we have discussed. I was not able to give you off the top of my head the overtime figure. I can tell you that we have moved significant numbers of additional staff from other duties in the department onto various aspects of tax credits work, so, in that sense, we have been adjusting the resource use.

  Q135 Jim Cousins: No doubt you could get the figures for us.

  Mr Varney: Yes.[8]


  Q136 Jim Cousins: Because there is every indication that your staff are under a great deal of stress.

  Mr Varney: Indeed.

  Q137  Jim Cousins: You reported a net reduction of 1,045 posts in your Spring Departmental Report. Could you tell us what that figure now is? Does that figure include anyone who worked in the field of tax credits?

  Mr Varney: It is about 2,300. I do not think it includes anybody in new tax credits, but I am quite willing to—

  Mr Gray: The number of people currently working on all aspects of tax credits is now larger than it was on 1 April 2004. So that overall reduction of 2,350 across the department as a whole is, as it were, net of some increase in resource that we have diverted into seeking to address some of the tax credits issues we have discussed.

  Q138  Jim Cousins: Within the overall pattern of net staff reductions in the field of tax credits, there is a contrary process of staff increases.

  Mr Gray: There has been up to this point. A significant part has been, as David Varney was saying, addressing, if you like, the symptoms of the difficulties we are addressing around complaints and around overpayments. Our commitment, our ambition, over this period to 2008, as we bring through the improvements we have been talking about, is to get a much bigger proportion of the staff on tax credits dealing with the underlying system and less resource employed in dealing with the difficulties which we aim to remove.

  Q139  Jim Cousins: If you introduce a system of manual suspension of overpayments what are the staff implications?

  Mr Gray: There will be some increase. A big variable here which has affected our staff deployment over the last few months is what, if any, implication that would have for the number of disputed overpayment cases that we needed to handle.


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