Examination of Witnesses (Questions 73-79)
RT HON
DAWN PRIMAROLO
MP, MR MIKE
HANSON AND
MR PETER
SHORT
24 JANUARY 2007
Q73 Chairman: Paymaster General, welcome
back to the sub-committee, I am sorry we have kept you waiting
slightly longer than advertised. Could you introduce your team
please and yourself.
Dawn Primarolo: On my left is
Mr Peter Short and he is the Team Leader in the Revenue Service
Delivery in Her Majesty's Treasury; and on my right is Mike Hanson
who is a Director General in Her Majesty's Revenue.
Q74 Chairman: Sir David Varney, the
Chairman of the Revenue, announced seven months ago he was standing
down and he stood down nearly six months ago. Why have we not
got a successor appointed?
Dawn Primarolo: David actually
left the Board in December and this would be a matter for the
Senior Civil Service Appointments Committee and ministers who
are more senior than I am. At the moment, as you would have heard
from Paul Gray, he is Acting Chairman with the same team, an excellent
team, and I have every confidence that they are taking the plans
forward that we developed for merger.
Q75 Chairman: Okay, but you are the
Minister responsible for HMRC and the Permanent Secretary last
October told us that the Treasury would resolve this very soon.
Are you really not able to tell us for an organisation for which
you are responsible about the chairmancy?
Dawn Primarolo: I am afraid I
am not able to update you on this, Chairman. As you know, it is
higher than a minister of state who would take a decision on appointments
of this type. What I know is that it is being considered and when
I have information I will certainly pass it on to the Committee
and ensure that it is, but I am not able to take it further. I
think what is important is that Paul Gray was part of the management
team before, he leads the same management team, the plans are
in place, and we are taking those forward.
Q76 Chairman: I understand that but
one of the issues we were told was being considered is whether
this position should be split between a non-executive chairman
and a chief executive unlike the way in which David Varney combined
both roles. Has that decision been taken?
Dawn Primarolo: No, it has not.
Can I ask, is there discussion on this? As far as I am concerned,
I am acting with the management team I have now with an Acting
Chairman of the Board and what view the Senior Civil Service Appointments
Committee and other ministers take on appointments I would not
be privy to at this stage.
Q77 Chairman: I just find it rather
odd that you do not know what is likely to be going on in the
bit of the department for which you are responsible.
Dawn Primarolo: What I think is
important, Mr Fallon, is that the department that I am responsible
for is taking forward its obligations in collecting tax, running
the system, the mergers and the arrangements necessary in order
to deliver the service that taxpayers want to see, and that is
my focus. If I were able to give you any more details on the questions
that you were asking me, I would of course share it with the Committee,
but I simply do not have that information at this time.
Q78 Chairman: Looking at the merger
process then, David Varney said that when he moved on in August
last year he saw that as ending the first stage of the merger
process. In your view, how many more stages are there?
Dawn Primarolo: I think the next
stage (and it is very much in line with what the Committee said
in its report on the merger when it considered this in 2004) is
actually now a five-year plan which is about the resources and
the configuration of the department. I assume, and if not I am
happy to go through it with the Committee, that Paul Gray covered
the structural changes and the very important building blocks
that are in place. And, therefore, in my view, by the time we
reach 2011 we should have the department, along with the powers
and, hopefully, the Management Act, which we are making preparations
for, using efficiently the estate and the staff we have to deliver
that taxpayer-focused service that we are supposed to be working
towards.
Q79 Chairman: One of the criticisms
we made at the time, and it seems to have come since in the memorandum
from HMRC, is that no specific detailed targets for the merger
to achieve were actually set, and there were reasons for that,
but how can you, therefore, be satisfied that all the benefits
are being realised?
Dawn Primarolo: When the Committee
made those observations with its recommendations in 2004, I agreed
with the points that were being made, and also the Committee said
it is very difficult—and at that point we had our Gershon
savings as well, now we have the forecast of a reducing budget
year-on-year in the next spending round—to try, wherever
possible, to identify costs directly with the merger. We have
tried to do this in the note we sent to the Committee, which I
am sure you have gone through. Then at other points it is more
difficult to break down the precise costs. For instance, with
STRIDE, how much was it development costs, how much then did it
become? That is the desk-top system, which was one of the O'Donnell
recommendations. Where would you actually put the costs? There
were two issues in the Regulatory Impact Assessment which, rightly,
the Select Committee focused on. One is what might be the staff
savings from merger. In fact, the Select Committee did draw attention
to the difficulty of trying to identify that when we also had
the other objectives, and what we expected the costs to be. So,
there was the £75 million in terms of costs. The department
has identified some of them both to me and the Committee. It tells
me it is within those costs, but with such change going on it
is increasingly difficult to tease out the precise costs.
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