When tax man is too disgruntled to collect taxes

LONDON BRIEFING:THE PEOPLE who collect our taxes are, it seems, just as depressed about it as the rest of us.

In a scathing report released earlier this week, Her Majesty’s Revenue Customs (HMRC) was heavily criticised for its inefficiency, lack of transparency and lack of commitment to the task in hand – ie, collecting the government’s cash.

Senior management was targeted for the most severe criticism in the report from an influential cross-party group of MPs, but the politicians also highlighted poor morale throughout the department, which was created in 2005 through the merger of the Inland Revenue with HM Customs and Excise.

Merging two Whitehall departments was never going to be easy, particularly at the same time as implementing a wide-ranging cost reduction programme. This has seen more than 17,000 jobs shed in the past five years, a process that is continuing. Add in the impact of the recession and it’s easy to see why civil servants at HMRC are depressed.

Calls are going unanswered – in one particular month only one in three calls was responded to – and the average response rate over the last year was just 57 per cent. Complaints about the department, which, as well as collecting taxes, handles the payment of child benefit and tax credits, jumped from 81,000 to 87,000. The bulk of these weren’t about tax demands, but rather about the rudeness of HMRC staff on the rare occasion they did actually pick up the phone.

It’s easy to be critical of civil servants, particularly those with the unpopular task of parting us from our hard-earned cash. But it is the government and the senior management at HMRC who must bear responsibility for the dire state of affairs within the department – it has long been known that the workforce is disaffected and, as the MPs noted in their report, there appears to be no plans to address the problem.

There can be little doubt that the crisis within the department has had a knock-on effect on HMRC’s performance, although it is impossible to calculate just how much it might have cost the government in lost tax revenue. Simply answering all the phone calls would surely have resulted in more revenue than rebates.

Recession and rising unemployment have made the issue all the more urgent. In times of economic health, an unhappy employee will often move on to a new job but in a downturn is forced to stay on, perpetuating the cycle of poor performance. Not only is the 78,000-strong HMRC workforce unhappy, it’s not going anywhere either.

The government needs all the help it can get as it struggles to reduce Britain’s massive deficit – only yesterday the Fitch ratings agency warned once again that tougher action must be taken. As they formulate plans to raise the extra revenue, politicians must also ensure that the department charged with collecting it starts to work with the government, not against it.

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PEACE HAS broken out between another group of disgruntled government employees – postal workers – and their masters, with the Royal Mail and the Communication Workers Union reaching agreement on an inflation-busting 6.9 per cent pay rise over three years.

The postal workers, who created chaos in the run-up to Christmas with a series of damaging walk-outs, look to have done extremely well. On top of their 6.9 per cent deal, they have secured a shorter working week (from 40 to 39 hours) and improved maternity and paternity leave. In return they will drop their opposition to the introduction of more machinery into sorting offices, for which they will receive lump sum payments from a grateful management.

Both sides hailed the deal, with the Royal Mail denying suggestions it had stumped up in order to avoid unpleasant industrial action ahead of an election.

But there’s always a loser and this time it appears to be the customer. Many deliveries will now be made later in the day and postal workers have also agreed to the lifting of restrictions on the amount of unaddressed mail they are required to deliver.

In the past, it was restricted to three items per household per week but now that limit has been removed it raises the prospect of a torrent of junk mail flooding through letter boxes. And that’s on top of the takeaway menus and taxi service flyers that already litter the nation’s doormats. The union had previously insisted that junk mail should be limited because of the extra weight in their postbags. One can only assume that their bumper pay agreement will make those bags feel a whole lot lighter.

Fiona Walsh writes for the Guardiannewspaper in London