Customer service levels collapsed in 2014–15 and early 2015–16 as a result of HM Revenue & Customs (HMRC) underestimating the demand for telephone contact and reducing customer service capacity by releasing 5,600 staff. Average call waiting times tripled compared with previous levels, transferring an unreasonable cost to taxpayers. Waiting times only recovered towards the end of 2015 after the recruitment of 2400 new staff but HMRC’s plans to cut the cost of its personal tax services by another 34% in the next five years raise the risk of another collapse in service levels. HMRC needs a clear understanding of customer behaviour to estimate how demand will change and must be confident that it can maintain service levels at an acceptable level before it releases further staff.
In January 2015, the previous Committee concluded that HMRC demonstrated little appreciation of the scale of the challenge it faced in replacing its Aspire IT contract, which provides its major tax collection systems. The Committee was concerned that the move to a new model of IT could bring substantial risks to tax collection and customer service. HMRC is now better placed to replace the Aspire contract and is doing so in phases which allows it to better manage the operational and technical risks. However, HMRC still has important decisions to take, and work to do. The next two years are crucial to HMRC’s ability to move to a new IT model from 2020 which lowers cost, supports improvements in customer service and protects tax revenue. Continuity in programme leadership will significantly improve HMRC’s chances of success. We will continue to track this programme.
25 July 2016