Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 40-59)


24 JANUARY 2007

  Q40  Jim Cousins: Okay. Of that so far just over 8,000 has been achieved. Does that net reduction of 8,000 include the more than 5,000 workers on fixed-term contracts?

  Mr Gray: No. Our starting overall staff figure includes the 5,000 on fixed-term appointments, so we started roughly speaking, at 100,000, including roughly speaking 5,000 who were on fixed-term appointment rather than permanent. The eight and a bit thousand reduction has been in the total. There has been I think some small reduction within that overall reduction accounted for by fixed-term appointments but we still have a large number of people within our currently reduced total who are on fixed-term appointment which gives us options and, if you like, a degree of flexibility about how we manage the on-going reduction.

  Q41  Jim Cousins: Let us be clear about that because it is important. The overall net reduction of 8,000 has not significantly reduced the 5,000 people on short-term contracts, they are an on-going feature?

  Mr Gray: There has been some reduction but that has not been a major contributor so far.

  Q42  Jim Cousins: In addition to the 5,000 people on short-term contracts, which is, let us face it, convenient for you perhaps in an organisation but unsettling for the workforce as a whole, how many thousand people do you have who have been identified as pre-surplus or surplus? I ought to tell you that I have a number of constituents who have informed me that they have been identified as pre-surplus or surplus for years.

  Mr Gray: I am afraid I do not have in my head or immediately in the papers in front of me a precise figure for the current numbers of pre-surplus staff but over the last year or so we have been talking about several thousand we have identified in that position. The point about pre-surplus is that as the particular jobs that those individuals have been doing are being phased out or ending, we have been giving staff pre-surplus status, which I recognise involves a degree of uncertainty and is unsettling for them, however our purpose is to identify them as priority staff for redeployment into other jobs as the composition of the workforce changes.

  Q43  Jim Cousins: Perhaps you would be kind enough to let the Committee know what the figure of surplus and pre-surplus is.

  Mr Gray: Yes, you want where we are currently.[1]

  Q44 Jim Cousins: In addition to that, Mr Gray, you may not be aware of this but in answer to parliamentary questions the Government has refused to tell me how many agency workers it has in HMRC because under the ONS definitions agency workers are not employees and so therefore they do not record them. How many agency workers do you have?

  Mr Gray: I am afraid again I do not have that figure.

  Q45  Jim Cousins: There is £106 million in the year 2005-06 on consultancy?

  Mr Gray: Yes.

  Q46  Jim Cousins: How much of that money and how many people are actually individually self-employed consultants who are bulking up the number of people you are actually using?

  Mr Gray: Some of them are operating on that individual basis.

  Q47  Jim Cousins: How many?

  Mr Gray: Again, I cannot give you the figure off the top of my head.

  Q48  Jim Cousins: Could you let the Committee know.

  Mr Gray: I will seek to do so.[2] Within our overall consultancy budget, which again I think we had some dialogue about when I last appeared before the Committee, we are talking about a range of different expenditures and quite a large proportion of the consultancy budget is not of the sort that you are talking about. I am also very actively reviewing our overall consultancy position and am looking to reduce the proportion of our budget that is going in that direction.

  Jim Cousins: The Committee has had evidence that in Southend—not an area I know well—

  Mr Newmark: A fine part of Essex!

  Q49  Jim Cousins: A fine part of Essex, yes indeed, I am prepared to believe that—there are 200 contractors and consultants in the Southend office earning an average rate of £650 a day. Could that be right ?

  Mr Gray: It may be right, I do not know whether it is precisely right or not. Southend is one of our major locations for very substantial IT work and across the different functions within the department our IT work is one of the areas where we have had a degree of use of consultants, not because we wish forever and a day to be having this work done by consultants but we have found there are some skills gaps where we do not have appropriately qualified staff to carry out the changing roles, and in order to deliver what we need to deliver my predecessors and I have taken a decision that that is the right way to go, but in all of those areas we are looking to make sure that we are skilling up our own staff working alongside the secondees or consultants so that we get the appropriate skills transfer and so that in future we are less dependent on that source of labour.

  Q50  Jim Cousins: You are going to let the Committee know what the detail is. Can I just ask you is it correct that in terms of uniformed Customs posts/permanent offices, there is one covering the whole of Scotland, five uniformed officers covering the whole of Wales, and in Devon and Cornwall there is no fixed Customs presence?

  Mr Gray: Mike may wish to add to this in a minute. I am not sure about those precise figures you gave but certainly we have moved, and the former Customs & Excise before the creation of the department moved in some areas of the country to a mobile deployment policy as the most appropriate way in order to manage the risks we face at the frontier. Just having people known to be in fixed positions at particular points along the coastline rather than having a mixed economy of some permanent deployment and a rapid reaction mobile force we have felt over the last number of years is the right way to move.

  Q51  Jim Cousins: Two offices in Wales, Cardiff and Holyhead, and Scotland with a coastline as long as France with one office?

  Mr Gray: I am not sure about that precise figure. I do not know if Mike can answer on that.

  Mr Eland: I am afraid I do not recognise those figures that you have given me. As Paul has said, we have a variety of different means of covering the frontier, some static, some mobile so I do not recognise the figures that you have given me.

  Q52  Jim Cousins: Perhaps if you do not recognise the figures you could give us the figures that you do have?

  Mr Eland: I would be very happy to produce a note on that for you, yes.[3]

  Mr Gray: I think another key point here, Mr Cousins, is we need to measure the success of this approach by how successful are we being on the level of seizures and the level of weight of seizures.

  Q53  Jim Cousins: The weight of drug seizures is going down.

  Mr Gray: Yes, but I think that our performance on a number of—

  Q54  Jim Cousins: Do you recognise that the weight of drug seizures is going down, since you mention that point?

  Mr Gray: I am not sure I do recognise that as a clear trend.

  Q55  Jim Cousins: It is in your Annual Reports for 2004-05 and 2005-06. I looked them up just before the Committee met.

  Mr Gray: As Mike has said, we will let you have a note in response to the earlier points.

  Q56  Kerry McCarthy: Can I ask you about staff morale in the wake of the merger. You mention in your written evidence that you run a series of employee surveys.

  Mr Gray: And we publish them.

  Q57  Kerry McCarthy: And in the most recent one that has been published, the May to June results, you talk about uncertainty amongst a large group of staff at the changes. What do you mean by uncertainty, do you mean unhappiness?

  Mr Gray: I think I mean uncertainty because we have entered the phase in the transformation of the department in which we are changing quite significantly a number of the ways in which we are doing our business, and that will mean for significant numbers of staff either they are taking on new roles or there are issues about the locations in which they are working. Again at my last appearance before the Committee we had some discussion with Mr Thurso in particular about the announcements that we made last year about our plans for what we are calling our workforce reduction programme in order to deliver the targets both in headcount and finance that I was discussing with Mr Cousins. I think that the general uncertainty that staff have faced about their personal position has probably been a significant contributory factor.

  Q58  Kerry McCarthy: So you are saying that they are unsure about what is going on and what the impact is going to be for them rather than saying they are unhappy with the merger as it has proceeded to date?

  Mr Gray: I would not pretend to be able to give you a precise answer for every individual. My judgment is that at the point we last measured, which was in mid-2006, that followed the announcement of the further three-year settlement for the department, again which Mr Cousins gave the figures on earlier, and we had not at that stage formulated detailed plans for the delivery of those targets. During the course of the autumn, as we discussed in the last hearing I attended, we started a major programme of engagement for the staff to share with them and engage them and involve them in the development of those detailed plans. I think the point at which we last measured staff opinions and morale was probably at a particularly difficult point for lots of people on our transformation journey.

  Q59  Kerry McCarthy: Do you expect the winter survey to show more positive results?

  Mr Gray: I do not know is the honest answer. I hope it might but I think during the second half of 2006 the sort of issues that I have just described were still very much there in the department so I prefer not to predict which way it is going to go. I would be extremely disappointed if during the course of 2007, as we are engaging staff much more fully and they feel much more involved in defining the future direction of the department and have greater certainty about what it means for their areas of work more generally and for them in particular, I would certainly hope during the course of 2007 we would see an improvement in that measurement.

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