Examination of Witnesses (Questions 80-99)
MR PAUL
GRAY CB
1 MARCH 2007
Q80 Kelvin Hopkins: If I could pursue
the staff points that Paul has been raising—in general terms,
are you satisfied with the quality of your staff? I am not saying
they are not willing but if they are not sufficiently qualified,
if they have not had sufficient training and do not have sufficient
skills, they will make mistakes. Then, of course, there are numbers
of staff; there has been pressure from the Chancellor to cut staffing
throughout the Civil Service and it may just be that even good
staff are overburdened, especially if they have measured performance
targets and that kind of thing, and those pressures make for mistakes.
Mr Gray: To start with your first
question, in general I am pretty satisfied with the quality of
our staff. We have a staff of over 90,000, not every one of them
is performing as well as they could and we are seeking to introduce
enhanced performance monitoring to identify more proactively where
we feel people could be doing a better job and give them the appropriate
support to do it, but overall I am pretty satisfied with the quality.
I am hugely satisfied with the commitment of my staff. One of
the main things that struck me when I arrived in the former departments
two and a half years ago was how incredibly committed the very
great majority of our staff are to doing a good job. Again, on
the pressures and tensions that you are pointing to, it is my
job to try to get that balance right. I have got to hit a number
of key targets and I need to identify whether any of those risks,
which are undoubtedly there, are materialising. So far, I am satisfied
that the process of reducing our staff is proving consistent with,
if anything, increasing the quality of what we are doing. We have
lost over the last 18 months something like 8,000 staff, a significant
proportion of those have come from our processing activities.
A number of the new management processes we are introducing, I
think, have significantly improved not only the efficiency of
what we are doing but the quality of what we are doing. I am very
seized of the need to respond to the risks we are identifying,
I recognise those risks are there, and so far I am cautiously
confident that we are managing them okay.
Q81 Kelvin Hopkins: I am sure you
are right about the dedication of the staff, it is my experience
of public service in general and the DWP as well. To look at the
loading of staff, you were at one time, not so long ago, at the
DWP, or the DSS[4]
I think. Some five years ago one of my staff was making an enquiry
to the pensions hotline and was told by an automated voice that
they were 83rd in line, a queue of 83 people, which was a clear
indication that however dedicated the staff were, there were just
not enough of them. Even allowing for peak loading, peaks and
troughs in demand, 83rd in a queue is really too much. I am sure
things have improved, but are you sure there is not too much pressure
on too few staff?
Mr Gray: If I can take that particular
example. Contact centres will undoubtedly be facing big pressure
on workloads. Over the last year, we have very consciously increased
our contact centre capacity, there are a number of areas in the
business where we have increased numbers of staff within an overall
reduction and contact centres is one and the number of staff working
on the frontier is another. The performance this year of our contact
centres is very significantly improved, we are exceeding our target
to have 95% of calls answered on the day they are made, we are
at something like 99% at the moment. Although it is not a formal
target, we have also been seeking to ensure that we get a very
high proportion of calls answered within 20 seconds and a year
or so ago that performance was not anything like as good as it
should be. This year we are getting to really quite high figures;
they are not as high as I would like to get to, so I hope that
is a sort of indication of the kind of responsiveness to identifying
what is happening on performance in different areas of business
and flexing resourcing to match it. That does not mean to say
that I do not sometimes face some difficult choices about where
to deploy the resources I have got.
Q82 Kelvin Hopkins: I am on the Government
side of the House, but I must say I have some scepticism about
the decision to merge what is essentially a benefits payment system
with the Revenue.
Mr Gray: In relation to tax credits?
Kelvin Hopkins: In relation to tax credits,
yes. There are two cultures, are there not? On the one side, you
are paying out benefits essentially to relatively poor people,
relatively less well off people, some of whom may have difficult
lives. On the other side you are seeking to bring in revenue from
people who may be reluctant to pay, who might be seeking to avoid
or even evade taxation, and those two cultures do not fit comfortably
together. Is that the case or do you keep them apart—so
effectively they are entirely separate within the Department?
Mr Gray: We do not keep them so
separate. I recognise what you are saying up to a point, and I
was in the DSS at the point when family credit was transferred
to the then Inland Revenue, but I think I will make two or three
points. One is within the former parts of the Inland Revenue concerned
with predominantly collecting money there are quite a large number
of areas where we are making repayments of money, so handing money
out as well as taking money in is not completely alien to that
culture. The second point I would make is that, particularly,
as with the new tax credits with a significant proportion of the
population entitled to new tax credits, actually the great majority
of those recipients are used to dealing with the tax system because
they are simultaneously taxpayers and recipients of tax credits.
I think the issues which a number of members of the Committee
have brought out around the stresses, strains and complaints that
we have had from tax credit customers, the greatest difficulties
in my view, and it is certainly true of the cases that I review,
tend to be in the more disadvantaged, relatively low income groups
which do not have a tradition of dealing with the traditional
tax system. It is for that reason—and it reflects one or
two of the comments I made earlier—that we are trying to
differentiate our service rather more and identify particular
types of tax credit customer who at the point they contact us
we might identify are more likely to have difficulty and, therefore,
are looking to have rather different approaches to dealing with
their needs.
Q83 Kelvin Hopkins: Another component
of this difference of culture is that tax collection by and large
is all annualised, it is a once a year event, whereas tax credits
are benefits payments essentially and they vary quite a lot within
the year with short-term changes. This was the great difficulty,
and you mentioned in your introductory remarks I think that people's
circumstances change within years and you have to pay upfront
because people need the money immediately. You have to deal with
claims at that time. With taxation, even if there are changes,
you can deal with it after the event and that is not a problem.
Was that difficult to deal with and has that led to some of the
problems with tax credits?
Mr Gray: I think the point you
identify is why the delivery of tax credits has proved challenging
to us as an organisation. The decision was taken by the House
to go for an annualised system and that is the issue we are seeking
to respond to.
Q84 Mr Walker: Could I ask a supplementary
very briefly. You mentioned calls answered in 20 seconds, that
is the ambition. Can you confirm that the call pickup will actually
be by a person, not an automated answering service? When you say
your aspiration is calls answered in 20 seconds, is that a human
physically picking up the phone and answering the call or an automated
pickup service getting the call and then referring it?
Mr Gray: I am talking about getting
through to be able to speak to somebody, yes.
Q85 Mr Walker: So it will be a person,
you will get through to an actual person in 20 seconds, not a
pickup service?
Mr Gray: That is the aspiration.
At the moment if you call in and cannot get an immediate reply
you may either have the not available or the engaged signal, clearly
you are not getting through. If you get through into a queue the
aspiration is to make sure the call is answered, not that after
20 seconds we get you in the queue and then we keep you in the
queue for however long we want.
Q86 Kelvin Hopkins: It is a bit of
leading question and perhaps you might want to be careful how
you answer it, but I think a lot of people's problems are caused
by ourselves in Parliament making the systems too complex. We
are trying to persuade people to vote for us and, therefore, we
like to throw out little sweets to people in terms of tax reliefs
and so on and this makes life more difficult for you. If you were
able to, could you make sensible suggestions to the Chancellor
for simplifying the whole tax and benefits system, to make it
much more easy to administrate so that many of these problems
would not arise and it would be fairer to everybody concerned,
on the one side making sure people got their benefits and on the
other ensuring that tax is properly collected?
Mr Gray: I think you are trying
to tempt me in the same way Mr Flynn was to talk about tax policy
and I will not be so tempted. What I am happy to commit to is
our job is to operate as best we can the tax system as it is laid
down, but I think it is incumbent on us as a delivery organisation
very proactively to feed back and make suggestions on the way
in which improvements can be made, whether it is a simplification
or any other respect. As I sought to bring out in the example
I gave to Mr Flynn on the November 2005 changes in tax credits,
I am very pleased with the way in which we have turned the policy
partnership between the Treasury and HMRC and how it is operating
following the merger decision and the decision that strategic
policy on tax matters should move from the former revenue departments
into the Treasury.
Q87 Mr Prentice: Very briefly, can
you remind me what the level of the National Minimum Wage is?
Mr Gray: I cannot, no.
Q88 Mr Prentice: You are responsible
for it?
Mr Gray: I am responsible.
Q89 Mr Prentice: You are responsible
for enforcing it?
Mr Gray: I am and, unfortunately,
I have come along this morning without the precise figures in
my head.
Chairman: That is the kind of trick question
they throw at you. He has probably got a worse one coming!
Q90 Mr Prentice: I shall be very
gentle. How many complaints have you had about the enforcement
of the National Minimum Wage? It is not a trick question, it is
a straightforward one.
Mr Gray: Again, I have not got
the precise data with me, I can happily let you have a figure
on that.[5]
My sense is we have had pretty few complaints. I think we have
probably had a number of implicit complaints from employers with
whom we have been enforcing this.
Q91 Mr Prentice: Is that because people
out there, like you, do not know the level of the National Minimum
Wage and they cannot complain if they do not know what the level
is if they are getting paid less than it?
Mr Gray: We do seek to make sure
in our contacts with employers what their obligations are and,
although I cannot quote you off the top of my head the precise
figures, I am very pleased with the successes that we have been
having on our enforcement.
Q92 Mr Prentice: I hope this is not
tax policy, but do you think it would be a good idea if there
was an obligation placed on employers to put the level of the
National Minimum Wage on wage slips?
Mr Gray: I think that is a policy
question. I can see, in this spirit of openness, that would give
people information. As with any of these so-called compliance
burdens, whether that is a kind of proportionate response is frankly
a political policy.
Q93 Mr Prentice: You would think
that is a good thing?
Mr Gray: I can see the advantage
of it. Whether the compliance costs balance the benefit is not
for me to say.
Q94 Mr Prentice: My local tax office
in Nelson is closing, the one down the road in Accrington is closing
and it is all being centralised in Preston, I think. Do you have
plans to move contact centres offshore? Are you sending any of
them to India?
Mr Gray: No.
Q95 Mr Prentice: Why not? Have you
considered this? Lots of other organisations are shipping everything
over to India.
Mr Gray: Other organisations have
considered that, I have not considered it, ministers have made
clear they do not wish me to consider it. I do not wish to consider
it, I want to make our UK-based contact centres as effective and
cost efficient as possible.
Q96 Mr Prentice: Finally, if I look
at the statistics from your annual report 2005-06 there is a huge
increase in complaints on debt management and enforcement—I
am not entirely sure what all that means—3,800 up to 5,300.
Is it that you are just more heavy-handed or what? What is behind
those figures?
Mr Gray: I cannot give you a precise
answer on that, maybe I could let you have a note on that. I think
it is not that we are getting particularly heavy-handed. What
this role relates to is where people have assessments of tax debts
to us, it is the stage at which we are having to take concrete
action to recover that money and we seek to be proportionate in
the way in which we do that, but if you would like me to let you
have a note on whether I can analyse what lay behind that increase
I will do so.[6]
Q97 Mr Prentice: Finally, I read in the
press from time to time "Inland Revenue swoops on taxi companies"
and so on that are not, allegedly, paying tax. Do you get many
complaints from third parties calling on you to move against people
who are suspected of not paying tax?
Mr Gray: We do get a significant
number of approaches, we have telephone calls pretty often from
people and there is correspondence. We are always very grateful
when we get that information, we consider whether or not to make
use of it. Our interventions on people we suspect who may not
be doing what they ought to be doing is based on a whole range
of risk-based information which we try and improve over time.
Spontaneous identification of suspicion by fellow citizens is
just one of those sources and it is valuable to have, but I think
it would be fair to say it is not consistently accurate.
Q98 Chairman: To end, you used to
have a charter for taxpayers, did you not?
Mr Gray: We did.
Q99 Chairman: It does not exist any
more, does it? You have customer service targets now.
Mr Gray: It is one of the issues
we are still debating and discussing with the Treasury. Both the
former departments moved through various evolutions and at one
point in that transition the Inland Revenue had something called
"The Taxpayer Charter"; Customs and Excise had something
broadly similar. As the two organisations merged, we do have,
and it is on our website and elsewhere, a summary statement of
our service commitments. We are still in the process of considering
whether it would be helpful to have some single short statement
that summarises what people can expect of us. Various leaflets
of ours seem to spell all this out. For such a large, diverse
organisation trying to capture all this on one single piece of
paper there is obviously a strong case for it, but it is not—
4 The Department of Social Security (DSS) was replaced
in 2001 by the Department for Work and Pensions (DWP). Back
5
Ev 134 Back
6
Ev 134 Back
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