Administration and effectiveness of HM Revenue and Customs - Treasury Contents

Written evidence submitted by David Hickson

Every call to the 0845 telephone numbers used by HMRC (and every other body that uses 0845 numbers) earns subsidy of its costs at the rate of around 1.7p per minute. The £5 million HMRC earns in this way will not clear the public spending deficit, nor would one argue that it is a bad thing for public bodies to save money. The government should however only be taking our money through properly applied taxation, not by undeclared access charges levied on public service users.

When we call these numbers our telephone companies reflect this cost to them in premium charges on us. (BT alone is regulated, so that it cannot itself charge for these calls, it can only recover the premium. BT customers are only paying the premium. Regulation prevents them from also paying BT, except through its standard call setup fee.)

The answer to a parliamentary question, Revenue and Customs: Telephone Services—Written Answer—11 October 2010, reveals some interesting statistics.

97.1 million calls were made to the 0845 numbers used by the HMRC network of contact centres in the year to July 2010. 35.6 million of these got no response.

I will make some (conservative) assumptions of the average durations for the three categories of call and the respective annual percentages given in the written answer:

—  Calls to an agent (54.2%)—5 minutes.

—  Calls to hear recorded information (9.1%)—2 minutes.

—  Calls which were never connected (36.7%)—1 minute.

Given these reasonable assumptions about call duration (which I am happy to revise if alternative data is provided) the annual subsidy earned by HMRC would be as follows:

—  From handling enquiries—£4,772,012 (97.1 M x ((54.2% x 5) + (9.1% x 2)) x £0.017).

—  From not handling enquiries—£605,739 (97.1 M x (36.7% x 1) x £0.017).

Not only is HMRC subsidising its costs at the expense of those whose call it by over £5 million, HMRC is earning well over half a million pounds a year by NOT answering the telephone.

By failing to benefit from the low rates and inclusive packages available for calls to "normal" (01/02/03) numbers, callers in general are effectively paying far more than this in premium charges. (As stated above, BT callers are only paying the premium, either through the call charge or their package subscription.)

To end this unacceptable rip-off, HMRC and other public bodies using 0845 numbers, must adopt the 0345 equivalent numbers (charged as a "normal call" in all cases).

I propose that, for example, 0345 3000 627 be offered for 0845 3000 627. I calculate that this would save an additional cost to callers of around £27.5 million a year, which dwarfs the £5.3 million that HMRC is earning. Smart procurement, in conjunction with other public sector bodies, along with retention of the 0845 number for those who benefit from the perverse effect of regulation of BT, would mean that HMRC would not suffer anything like this in additional cost on making the alternative available.

This low-cost, quick and simple option is the perfect solution for the present environment when all budgets are under pressure and the expense of complex number changes is not worth considering. Instructions to swap the first "8" for a "3" in every published number would be easy to communicate. The equivalent 0345 numbers are all reserved and ready for use within the term of any existing contract for telephone service.

November 2010

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