HMRC’s Performance in 2016–17 Contents

3HMRC’s customer service performance

19.Every year millions of people contact HM Revenue and Customs (HMRC) by telephone, by post and online. HMRC employs around 25,000 staff to provide these services to customers. In 2016−17, HMRC considered its customer service performance improved significantly, achieving its best performance in the past five years against its key targets.39 HMRC told us that the main reason for the improvement was additional funding, which comprised of £28 million in 2016−17 as part of a £71 million investment in better customer services.40 HMRC are in negotiations with HM Treasury to secure further funding. The Department made it clear to us that, if additional resources are not secured, there will be a potential risk in future years of customer services getting worse again, a pattern we have seen before.41

20.HMRC acknowledged that sustaining its improved performance will be difficult given the assumptions, described by the Department as aggressive, that underpin its transformation programme. One of the key assumptions HMRC made in 2015 was that customers’ demand for its services, particularly phone contact centres, would reduce as it introduced more digital services to meet their needs.42 However, in 2016−17, its advisers had to deal with eight million more calls than forecast.43 HMRC explained that, although two new factors had led to a rise in calls (the ending of the Concentrix contract and the increase in ‘high value repayment agencies’), on a like-for-like basis the number of telephony contacts had reduced. HMRC expects further reductions in the number of people contacting HMRC by phone. In 2017−18, as at the time of our evidence session, HMRC told us that there has been a reduction of 8% in telephone contacts, slightly behind its forecasts. HMRC stated that it will try to avoid reducing the number of its staff that deal with phone calls before it is certain that demand for its services has reduced. But, in light of HMRC’s resource constraints, it was not able to guarantee this.44

21.The previous Committee recognised that the challenge of getting customers to use online methods of contact was the key risk HMRC faced in personal tax services.45 HMRC acknowledged that if its assumptions turn out to be incorrect or unsustainable then customer services will be at risk.46 HMRC told us it is not just focussed on transferring demand for its phone contact centres across to its digital services. It is also aiming to remove demand altogether by providing the necessary support tools to meet the anticipated needs of its customers. We raised our concerns about how HMRC will meet the needs of the digitally excluded, for example those in rural areas with poor connectivity to online services, and vulnerable people. HMRC told us that it will continue to provide phone services seven days a week and will offer face-to-face services through surgeries for customers in 300 locations to ensure that it meets the needs of vulnerable and digitally excluded customers.47

22.HMRC has a basket of measures, each with a corresponding target, to monitor its customer service performance. In 2016−17, HMRC reported it had achieved all nine customer service targets set in its single departmental plan. HMRC improved its average speed to answer calls from approximately 12 minutes in 2015−16 to under four minutes in 2016−17. HMRC’s existing telephone measures, however, risk miscategorising or excluding important aspects of customer experience. HMRC acknowledged that it has received some helpful suggestions from the National Audit Office on how it can improve its basket of measures to better reflect the experiences of its customers.48

23.HMRC’s established approach to measuring call-handling counts most calls terminated in its automated telephony system as successfully handled. HMRC counts around 25% of calls as handled by its automated telephony system.49 We asked HMRC why it assumes that all customers who hang up during the automated message have had their query resolved, particularly as most of our constituents terminate their phone calls from a sense of irritation and frustration at the long waiting times. HMRC agreed that there are a lot of customers who are very frustrated with automated messaging. HMRC told us that automated messaging can provide some real advantages. It will continue to develop its automated telephony to ensure it strikes the right balance between providing customers with the information they need and routing customers to an adviser as quickly as possible. The Department told us it recently introduced voice recognition technology with the aim to shorten automated messages by 30 seconds.50

24.When measuring the speed with which it answers calls HMRC excludes the amount of time customers spend waiting in the automated telephony system. HMRC told us that there is no industry standard for measuring average speed to answer calls, so HMRC has chosen to measure it from the point at which a customer is available to speak to an adviser, after listening to the automated message.51 HMRC told us that in 2017−18, as of the end of September, the average speed of response for a customer, after getting through the automated message, was four minutes and 37 seconds. HMRC has been given the required investment to achieve a five minute average. However, customers can spend two to four minutes in automated telephony before entering a queue for an adviser so the total time waiting can be up to nine minutes.52 HMRC told us that it considers five minutes, including the time spent listening to automated messages, to be an acceptable average speed to answer phone calls. We expressed our concerns that most people would reasonably include the time listening to an automated message in any measure of speed to answer calls. For HMRC not to do so is particularly unacceptable in light of the service the Department offers to the high-net-worth individuals who have their own dedicated customer relationship managers, now called customer compliance managers. The Department told us that it is not aiming to be a “world-class contact centre”. Its focus is on delivering services through a range of channels, principally digitally, with the aim of becoming a “world-class digital tax authority”.53

39 Qq 118, 144; C&AG’s Report, paras 16 and 3.1

40 Q 118; C&AG’s Report, para 3.6

41 Qq 119−120, 142−144

42 Qq 98, 113, 121

43 C&AG’s Report, para 18

44 Qq 121−122, 140

45 Committee of Public Accounts, Thirteenth Report of Session 2016−17, Quality of service to personal taxpayers and replacing the Aspire contract, HC 78, Incorporating HC 79

46 Q 113

47 Qq 124−125

48 Q 139; C&AG’s Report, paras 19 and 3.9 and Figure 13

49 C&AG’s Report, paras 19 and 3.29

50 Qq 126−129

51 Q 130; C&AG’s Report, para 19

52 Qq 133, 134, 136, 137; C&AG’s Report, para 19

53 Qq 131, 132, 135; HM Revenue & Customs (HMR0004), Q 33

10 January 2017