Administration and expenditure of the Chancellor's departments, 2008-09 - Treasury Contents

Examination of Witnesses (Questions 240 - 259)



  Q240  Mr Todd: Could you summarise that position to us as well?

  Ms Strathie: Yes, sure.[7]

  Q241  Mr Todd: I agree with what you just said, incidentally, but I would welcome a bit more quantification as to how you are approaching that.

  Ms Strathie: Yes, we will do that.

  Q242  Mr Todd: The online PAYE system has been rescheduled, is that right? This is the change to the online PAYE service.

  Ms Strathie: The modernisation of PAYE goes on. We have talked about release 3, 4 and 5 which will give our people a single view of their customer and enables them to answer the vast majority of questions. You may be talking about our next big wave of PAYE. At the moment we have been working our way through feasibility and a number of options for what we might recommend to Treasury.

  Q243  Mr Todd: We are nowhere near to getting a particular picture of where we are.

  Ms Strathie: No, we have not issued a consultation document or anything like that yet.

  Q244  Mr Todd: Okay. Can I just turn to some efficiency questions as well? The website that covers value for money for HMRC has a variety of figures within it on operational savings but I was not entirely clear whether some of them overlapped each other, so it would be helpful to separate them out. If I pick out some of the ones where I puzzled in particular, there was the reference to reductions in administrative work related to greater accuracy as a result of direct data input. This is over self assessment, PAYE and encouraging online filing and that produces a saving of £50 million by March 2011. There is what I would take to be a separate amount relating to workforce changes and estate management of £70 million by 2011 and then there is another one which relates to £60 million worth of savings through the delivery of the OEP back office programme. Some of these appear to be shooting at similar targets so it is not quite clear whether they are all added together, they overlap to some extent, what?

  Mr Bowles: The answer to that is you can add those together and I would be very happy to give you a note showing how those relate to each other.

  Q245  Mr Todd: They are all separate and there is no overlap saying part of that includes a property saving and that is in this figure as well.

  Ms Strathie: No, we manage this as a portfolio, as one programme, and indeed it is internally audited and open for NAO to validate our figures, so we are clear on that.

  Q246  Mr Todd: With efficiency programmes of this kind, and you have had plenty of experience of this already, we have discussed staff morale implications—that is one thing that certainly arises—the other implication can often be a decline in customer service. How are you monitoring the quality output when you deliver a change programme that delivers a saving of this scale?

  Ms Strathie: Could I use the example of MPPC3 that we have talked about? We recognise that this is a huge change for our people and a huge change in the use of the IT and the information, and in line with best practice we put in 1,500 floor walkers, skilled up and ready, who supported their colleagues from day one go live and also all of our coaches and quality managers captured all the immediate learning because you could not practice on the system, it was a release and a no regression basis. We captured that straight into the central programme, constantly (it is almost on a daily basis) with our suppliers, deciding, "Is this an IT tweak we need here, or is it actually a process change, or is it a quality learning issue?" I think the success that we have had and the rate that our people are getting up their learning curve means our customers are getting a much better service. It will not be perfect until we have had the next two releases.

  Q247  Mr Todd: This is your floor walkers telling you this. Is there an external reference?

  Ms Strathie: Across the different products and services that HMRC delivers, we have accuracy measures and we have quality managers. I would not pretend that we do everything perfectly everywhere, but we do have to look through our problem-solving techniques and lean processes to collect that information and put it back into the system in terms of how we train and develop our staff.

  Q248  Mr Todd: The answer to my question directly: there is not a formal external reference point to test your quality, other than direct complaints of some kind?

  Ms Strathie: The NAO audit us, we have a number of people who take a very strong view of different parts of our service, and whilst our customer unit is still internal to HMRC, we do operate it in a way that it is a challenge to the business.

  Q249  Mr Todd: I think when I asked you about your relationship to Mapeley before, I was surprised to find that you had a very flexible arrangement in which you could, effectively, toss back office space to them to sort out without any penalties at all. Is that the case?

  Mr Bowles: Can I come in on that? I think it was not quite as rosy a picture as you described. We do have a lot of flexibility and over the contract (which, as you recall, runs for 20 years from 2001) we can hand over 60%.

  Q250  Mr Todd: So you can hand over any 60% of your property without penalty to them.

  Mr Bowles: Yes, and over a period of time. It is not something that we can do immediately.

  Ms Strathie: It is 12 months' notice we need to give, minimum.

  Q251  Mr Todd: Sure, the normal penalties one might expect of unfulfilled leases do not apply.

  Mr Bowles: They have essentially taken on that portfolio.

  Q252  Mr Todd: They take that risk.

  Mr Bowles: Yes.

  Q253  Mr Todd: It would be useful to have a little note summarising that. If you are going through a programme of significant office reduction, which you are, it would be useful to know what the constraints are.[8] I must admit, I admire the person who negotiated that, if that is indeed what it is.

  Ms Strathie: At the end of the day, this is one of my largest contracts, the other being Aspire, and you get the best by working in alliance; so we work very closely in how we do that.

  Q254  Mr Todd: Nevertheless, they have got a chunk of risk.

  Ms Strathie: Yes.

  Q255  Nick Ainger: Can we go back to the staff morale issue and the changes that have happened over the 12 months to 31 March 2009? What impact have those closures had on morale and performance, and how do you measure performance?

  Ms Strathie: We always assess measures depending on which area of the business we are involved in. If I go back to the morale issue, we are very clear about what the survey tells us, and that is why we are very eager that we encourage everybody to fill in the new survey and we deal with the findings. We are committed to doing things about it, but the morale issue for many is that they have been in a position for quite a long time knowing the building they work in is not a strategic site for the job that they do, or that the job that they do is now done in another way, on a self-serve basis or online, and that we have not been able to find a new job for them—they have not been able to move to where the work has moved or another opportunity—and for people who have, in many cases, quite long service, the only certainty we might bring is that there is no future for them or we cannot place them in another government department. That is at the core of our issue. I also think in our tax profession, which is about 17,000 of our workforce, we have recognised a need to build that profession and deal with some of the gaps we would foresee in future years and upskill and accredit our people. So we have taken an enormous amount of action and what it tells us. I am not going to say I will come back here in six months' time and there will be a step-change in the survey of sorts in morale, but that does not mean that we are not doing an enormous amount on this.

  Q256  Nick Ainger: I hear what you say, but it seems to me that what you are saying is you need to tackle some issues relating to individual members of staff, training, and so on. If you actually look at the survey published in February 2009, the most severe criticism is aimed at management and, in particular, senior management. I will just quote, for the record, some of the results: "When changes are made they are usually for the better". Sixty-seven per cent said, no, they are not, and only 9% agreed that they were. "HMRC as a whole is well managed." Sixty-four per cent said, "Oh, no, it is not", and only 11% said it is. "And overall I have confidence in senior civil servants in HMRC." Sixty per cent said, "No, I do not", and only 11% said, "Yes, I do." Does that not give you an indication that perhaps this morale problem is actually not about staff performance but about senior civil servants' performance?

  Ms Strathie: Yes, I absolutely accept that. The point I made earlier in the work that we have done (bearing in mind we have an awful lot of managers and leaders in HMRC), despite all of that, many of our managers do not believe they need to change, and clearly we all need to change. The best performance will be delivered at the end of the day with a skilled, motivated, engaged workforce that is proud to work for the department. I do not defend those results in any way at all.

  Q257  Nick Ainger: In the report it is rather difficult to establish exactly how many people left HMRC in the year from March to April 2009, because the report quotes various categories of how they left. It is on page 40. Is that the total number that left in the 12 months to April 2009, or were there more people leaving because, basically, they were on maybe short-term contracts, they had moved on because they got an alternative and they were not engaged in any severance scheme? I am just wondering about the actual numbers, because earlier in the same paragraph it says that the numbers have been reduced from 105,000 to less than 89,000; it does not actually give the dates for those.

  Ms Strathie: The 105,000 is when the department was created in 2005, and the 89,000, and they are both people figures, they are not head count, so they are not full-time equivalent. We have about 25% of people who work part-time. So they are people numbers.

  Q258  Nick Ainger: I added all those categories up and it came to 2,061 members of staff. I do not know if that is full-time equivalent.

  Ms Strathie: Our staff in post figure on 1 April 2008 was 83,828. So by that time there was a reduction of 13,927; 1 April 2009, 81,160; 1 October 2009, 78,424. In between all of that we also transferred a small number of people to SOCA, when it was created, and we transferred 4,500 to UKBA.

  Q259  Nick Ainger: Have you got a figure of the number of people that left HMRC in the 12 months to April 2009?

  Mr Bowles: It should be 2,700[9] approximately. I am just taking the difference between the two numbers that Lesley quoted.

  Ms Strathie: But you get a snapshot at the start and you get a snapshot at the end. Clearly, people enter the organisation and people leave the organisation during that time.

7   Ev 95 Back

8   Ev 96 Back

9   Note by witness: The net leavers figure for 2008-09 was 2667 FTEs. Back

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