The administration and effectiveness of HM Revenue and Customs

Supplementary written evidence submitted by the Association of Revenue & Customs

ARC (the Association of Revenue & Customs) represents over 2,600 staff employed by HMRC in Grade 7 upwards, and people on training courses leading to that Grade. Our membership extends throughout the SCS up to and including Board level.

In response to the publication of the 2009 People Survey for HMRC, showing extremely low levels of staff engagement, ARC commissioned a programme of work in order to identify which issues were most significant for its members and what could be done to resolve problems.

A working group of 22 people devised a set of 19 questions and a standardised meeting and data capture format in order to produce comparable data. 10 meetings of ARC members were held across the UK between July and September 2010, with one specifically targeted at SCS members, in order to canvas a broad range of views. A face to face format was chosen so that issues could be explored fully, examples given and solutions proffered.

The output from all these was collated and condensed into a report, the findings from which are summarised here.

What our members find is wrong

· Staff find that that they are subject to minute and petty scrutiny and at times deals are done on cases over their heads. They therefore do not feel trusted and the micromanagement means the business stagnates while decisions are awaited from higher up the management chain.

· Senior staff are excluded from the decision-making process on changes to the organisation with policy being imposed from the top. A huge gulf exists between the confidence in the decisions made by immediate managers and those made by HMRC's senior managers. Senior staff do not feel valued – their experience and knowledge counts for naught and they feel disempowered through not being involved in the implementation of change and the running of the organisation.

· The way the organisation has been shrunk has led to management issues. Remote management means work and staff are not always well supported. The withdrawal of autonomy and the lack of HR support for managers, coupled with an increased appetite for statistics, means focus on delivery is being sacrificed to administration.

· Whilst the Department says it wants constructive challenge, most if not all comments are viewed negatively. This view was felt to apply more strongly the higher up the Department the proposed change or decision is made. It was felt that there was often overreaction amounting to bullying. There is a presumption that projects sponsored at the highest levels will not fail, but it is difficult to see how success can be maximised without proper early consultation with affected parties.

· Staff do not feel involved in developing HMRC objectives as priority is given to processes and systems rather than the core work and Workforce change has been badly handled – the silo structure has created artificial barriers leading to an ‘us and them’ culture. The reasoning behind decisions has not been explained and it was felt that the impact of change was not understood before introduction. This has lead to unnecessary intervention instead of delegating responsibility for implementing change to the appropriate level so staff have been unable to make improvements as the process develops.

· The purpose of changes made have not been well communicated and the assumption is that the changes are all aimed at cost-cutting and that the effect on work outcome (e.g. narrowing the tax gap) is not a factor. Without effective communication and concomitant levering up of skills and technology an engaged workforce on board to deliver will not be achieved.

· Learning and development has been sacrificed to cost cutting. For tax professionals, there is a question mark over what career there is to Grade 6 and beyond based on that tax professionalism, with Excom members promoting a horizontal career path. Learning and development is critical at a time of change and a pre-requisite for a professional workforce whose technical ability is the engine which drives the department.

· Members find that their professionalism in doing the job is increasingly undermined.

· Members feel that they work with people who genuinely care about what they do but they don’t feel that they work for people who genuinely care. It is wrong that their ability and professionalism is not acknowledged nor is their work defended when criticised in the press.

· Members have reported discrimination on the basis of sex, race, sexuality, age and disability. There is no procedure for reporting these outside of the normal management chain.

What we want to see done about this – ARC’s 9 point plan to improve staff engagement in HMRC

1. Trust us – staff have demonstrated for decades an ability and integrity in bringing in billions to the Exchequer; petty checking and bureaucracy are counterproductive.

2. Consult us – we understand the business and we have the knowledge and expertise to do the job. We can identify the advantages and pitfalls of any potential change. But we can't help if we don’t know the purpose of any changes, or how they will be better for the business.

3. Treat us honestly – if initiatives founder in the absence of any input from senior staff, failure is not our responsibility. If there is no choice as cost is the sole driver, tell us.

4. Empower us – we’ve a well earned reputation for delivery because we have the ability, drive and vision to achieve results. Set us free to do it and don’t micromanage us. Managers need to be able to take immediate action locally, not pass problems up the chain and wait for someone else to make the decision.

5. Listen to us– we want to work for a successful organisation. Constructive analysis of problems and presenting solutions helps that.

6. Involve us – constant change when business plans are handed down as a fait accompli leads to crisis management.

7. Let us be influential – we have long experience of change and huge knowledge of how the business works and fits together. A process may be efficient on its own but not work with the rest of the organisation; in order to provide a seamless service for the customer the business needs to be looked at as a whole and from end to end.

8. Develop us – we have wide and varied expertise, but the legislation which governs us changes as does the environment we work in. We need regular training in areas such as technical issues, management and leadership development in order to provide the best service to the organisation. This needs to be properly resourced.

9. Value us – the performance of HMRC against other government departments in the last 2 People Surveys was dismal. We’re still really committed to public service, but because we’re not engaged we feel at times we’re doing the job despite the senior leadership, who do not seem to defend us when we’re under external attack. We want our professionalism and integrity to be recognised.

March 2011