Memorandum from TaxAid
Note that TaxAid has extensive experience of interactions
with HM Revenue and Customs and that in consequence responses
are limited to that organisation, although they may have relevance
to other statutory bodies.
1. Can public services learn from the way
that either non public sector organisations ... make use of user
experience in service delivery and design?
The fundamental difference between a non-public
organisation (and especially a charity such as TaxAid) and a statutory
organisation is that the former has a much greater degree of control
on what it chooses to do, who it chooses to serve,
and how it delivers services. So for example, TaxAid has
much more discretion in terms of meeting users' expressed needs
because we determine who those users are. The limiting factor
in meeting expressed need is of course resources, but as a charity
we have the freedom to try to raise funds to meet such needs (doesn't
always succeed of course). To the extent that increased access
to funding is a result of demonstrating that they meet service-users'
needs it becomes in the voluntary sector's interest to pursue
this objective. In addition, many not-for-profit service delivery
agencies are relatively small and based within the communities
they serve, sometimes even using volunteers from that community.
These above conditions cannot be replicated
by HMRC. They do not have the freedom to choose their "users"—and
those they claim as their "customers" are a vast and
diverse number. They might—and arguably have—tried
to import the ethos of listening to the "customer".
But, given the fact that the customer has no alternative provider
of tax services it is impossible to replicate the discipline of
meeting users' needs (see detail below). Resource constraints
will severely limit HMRC's ability to deliver what people express
that they want: people with tax problems want a local Revenue
office where they can talk to a well trained staff member face-to-face
in their own language. Many of these local offices are scheduled
for closure on cost grounds and being replaced with phone and
website access. So consulting with users on this issue would be
something of a charade.
Meeting of customers' needs at the highest of
standards should be a leading tool in delivering the best quality
of services, given that HMRC has no competitors in service delivery
so that customers have no choice of provider. Monopsony of provision
is also somewhat the case for TaxAid in that there is no other
organisation that provides free tax advice for the range of unrepresented
taxpayers. The crucial difference is that people can choose not
to use TaxAid, can ignore our advice or—at the extreme—could
ruin our reputation and with it the ability to raise funds, with
claims of poor service. The point is that a charity which relies
on donated income has to be concerned with its reputation with
clients. This (albeit limited) market discipline is absent for
statutory-sector service providers. That is the statutory cannot
react to financial incentives (eg increased number of customers)
which indicate satisfaction.
2. Is it possible to set minimum standards
for public services? If so, how is this best done?
In the context of HMRC, the Charter by which
taxpayers could hold the Revenue to account was withdrawn in 2003
and replaced by "customer service targets" which could
be argued to hold the Revenue to less stringent standards (for
example the target of dealing with 80% of client queries within
a particular timeframe gives opportunity to classify all unsatisfied
customers as part of the 20%! In practice, standards are easy
to circumvent (eg requirements to deal with a case in a particular
timeframe encourage standard letters saying that the matter is
being looked into), but they do give complainants a yardstick
by which they can measure what they have actually received compared
to what they are entitled to expect. As an organisation that understands
the intricacies in a way that the unqualified public cannot be
expected to do, TaxAid found the Charter a useful tool when representing
the taxpayer with grounds for complaint.
In terms of HMRC policy, practice and procedure
it might hold HMRC and its paymasters to higher account if they
were held to publicly-available "outcomes" that meet
well-known problems that impact on unrepresented taxpayers (ie
those who do not have a tax adviser—at approximately 85%
of taxpayers). These desirable outcomes could include such issues
as the establishment of a "single account" (whereby
taxpayers have all their relationships with HMRC held under a
single "client record" and accessible to all HMRC staff—and
thereby the taxpayer). Or an obligation to provide comprehensive,
adequate and timely information on request—this begs the
question of who decides whether it is comprehensive, adequate
and timely. Under "putting people first" it would necessarily
be the customers with their vast range of capability in grasping
the implications of the situation.
The problem that HMRC is grappling with is that
at the highest levels within that organisation they do largely
understand what the public needs in the way of tax simplification,
however difficult it is for them to inculcate a "customer-first"
attitude in the ranks. HMRC's real difficulty is in the fact that
the government of the day introduces massively complex tax rules
to further its social objectives, so that—given funding
constraints from central government—HMRC has little room
to manoeuvre, reacting only to public pressure when the government
is embarrassed. On the whole the public do not understand sufficient
to create the sort of pressure that impacts on the tax system—and
nor does the media cover issues in respect of tax because it is
perceived not to sell papers (Tax Credits is a good example of
these last points). The point to note is that the public would
be unhappy to be "consulted" at the level of the statutory
authority on issues where there is no possibility of meeting their
needs.
3. What role do measures of customer satisfaction
have in assessing the standards of public services?
Sadly, because of the huge complexity of the
tax system, "customers" of HMRC (and indeed clients
of the charity TaxAid) are not really in a position to judge the
key element of service—which in this context is whether
they were given the correct information or advice. In our experience
of customer surveys, since they have no other basis for making
judgement, clients are more inclined to assess satisfaction on
the basis of whether their experience was "pleasant"
and whether their adviser had good interpersonal skills.
TaxAid has the advantage of having roots in
the private sector (i.e. in that it was originally conceived as
a "free to the end-user" accountancy and tax advice
firm) so the ethos remains individual and collective responsibility
ie as an organisation we have standards that exceed those that
clients might reasonably expect in the public or charitable sector.
This means that individual employees are held to account for outcomes
and efficiency is the cultural norm. In the counter-culture of
the Revenue, where it is the taxpayers themselves who are held
to be responsible for meeting their obligations under the tax
system, the onus of responsibility is removed from the individual
statutory sector employee.
3.1 How should user views be monitored?
The problem we find if trying to reach random
clients via a letter or phone call is that only the far ends of
the spectrum of happiness to dissatisfaction are inclined to respond.
There is also evidence of a high level of "survey fatigue".
So we require all clients who come for advice over a particular
timeframe to complete the Client Survey while they are in the
office. This is less than optimum in that these days the majority
of queries are likely to be over the phone or via e-mail. It is
done willingly enough as it takes only a couple of minutes and
the clients' anonymity is ensured.
4. What constitutes best practice in responding
to complaints about public services?
And
5. Is information about complaining easy
to find and accessible?
There is a fundamental problem in terms of lack
of taxpayer awareness of tax issues so that they are in a poor
position to understand whether they do have grounds for complaint,
and whether their complaint is within the terms of what HMRC can
reasonably be expected to do, let alone finding a route to making
a complaint about poor advice. For example, a caller asks whether
she will "have to pay tax" if her mother gives her half
the house. The short answer is that there is no tax liability.
But there is no requirement that HMRC consider if there is a potential
Capital Gains Tax Problem here. Another example would be where
a claimant rings the HMRC Tax Credits helpline for guidance on
childcare provision and the HMRC adviser gives the wrong advice
(the rules on eligibility of which have changed three times in
as many years). In these cases—as in perhaps the majority
where taxpayers might feel aggrieved—HMRC do not take responsibility
for advice given (even if incorrect), and there is no recourse
to compensation.
It is difficult not to conclude that HMRC tries
to avoid having to deal with complaints and their consequences.
For example, unless a letter addressed to HMRC has Complaint as
a heading, what is fundamentally a letter of grievance is not
passed to someone in authority to handle it as a complaint. It
would seem that best practice would be in "allowing"
complaints made by the public (even if technically they misunderstand
the role, rules or procedures of HMRC) in order that lessons could
be learnt about aspects of the tax and Tax Credit system that
the public find difficult to understand or comply with. Until
complaints are welcomed by HMRC as a means of delivering a better
service they will be seen purely as a resource cost—by improving
service they may in fact lead to less in the way of errors and
duplication, and enable HMRC to anticipate customers' needs. They
may even feed-back into tax policy and procedure which are then
designed to meet customer needs (as against making later adjustments).
It is not for nothing that TaxAid's internal complaints procedure
reaches as high as the Chairman of Trustees.
6. Should users be more directly involved
in service delivery? If so, how can this be achieved?
Because of the barriers as detailed above it
will be difficult to get a balanced response from HMRC service
users (i.e. the wide spectrum of taxpayers and Tax Credits recipients).
HMRC customers are likely to prefer contact with HMRC at arms
length (e.g. through their primary advice providers like One Parent
Families etc). Our view is that a more effective involvement can
be achieved through dialogue with the voluntary sector representatives
of their "customers". However, the consultation needs
to be "real"—ie too often "consultation"
is about issues that are already cast in stone—for example
the difficulties on introducing Tax Credits were predicted by
the tax bodies and voluntary sector advisers and were avoidable.
Too often "consultation" has not resulted in changes
to meet customers' needs, but results rather from more strident
campaigning and/or press coverage. This might be just as pertinent,
but is likely to risk delivering to the loudest special interest
group.
In the current situation for HMRC user consultation
would be meaningless and the outcome disappointing for the customer.
7. Are there certain types of decision which
are more suited to consultation than others?
Obviously problems which offer real choice—so
for example, on the format and design of an interactive website—but
clients are very unlikely to be in a position to know what they
need at an early stage in design and delivery—the timing
of consultation is thus critical. Testing out policies and procedures
in a limited form with taxpayers prior to rolling out the new
procedures has benefit too e.g. the trials of the shortened tax
return for those (including elderly) people who have relatively
simple sources of income (eg pensions, savings interest, possibly
some earned income from rent etc).
8. Do official consultations typically manage
to capture the views of the right people? What kinds of consultation
are most effective in engaging with the appropriate people?
In terms of the taxpaying public it is problematic
to determine who are the "right" people. HMRC exists
to collect the correct amount of tax from all those who
are required to pay tax. Yet one in three taxpayers whose tax
is collected under PAYE has the wrong tax coding (ie the implication
being that they are paying the incorrect amount of tax); one in
three tax returns is incorrect (with a similar implication); £2
billion of overpayments of Tax Credits were made in 2005-06 (and
an estimated £2 billion of Tax Credits remains unclaimed).
Yet the vast majority of these people will be unaware that they
have a potential problem with their tax—or that they might
be called upon to find money to cover unexpected shortfalls in
their tax liability. It is only when the underlying problem manifests
itself, perhaps as a tax demand that they can't meet, that people
come forward looking for help and advice to resolve the issue.
Nor is it until the crisis point that people in the UK are prepared
to take an interest in their responsibilities under the tax system
(unlike for example in the USA where the incentive to understand
tax is provided by the universal requirement to file a tax return
which effectively reimburses overpaid tax).
On the other hand, the "right" kind
of people might be those who are aware that they are having difficulties
with the tax authority (in terms of understanding their obligations
or of meeting them because of their circumstances). But these
are likely to be representative of the extreme end of the spectrum
of HMRC customers. HMRC themselves would probably benefit most
(in terms of efficient allocation of resources) through a dialogue
with those of their customers who are non-compliant—but
by the nature of this are very difficult to reach. Confidential
helplines set up by HMRC are a valuable resource for those not
wishing to lose anonymity.
9. How valuable are advisory panels in the
design and delivery of public services?
Consultations with the voluntary sector could
be invaluable to HMRC (and inform government policy) if they are
timed correctly—and acted upon! The problems with Tax Credits
publicized in the press were foreseen and largely avoidable had
they not been introduced in the form and timeframe which put too
much pressure on HMRC and the voluntary sector to be adequately
trained to advise on them.
10. How does user influence relate to wider
issues of democratic accountability?
11. How should measures of public satisfaction
take account of complaints about policy rather than administration?
This is a political decision, but see answer
to 9 above.
12. Are there situations where the views
and experiences of service users are irrelevant?
Views, as above. Experiences are much more likely
to be a source of guidance on good practice.
January 2007
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