Saturday, March 13, 2010

Why is HMRC staff morale so low?

Last month the Treasury Select Committee published a rather impressive report, Administration and Expenditure in the Chancellor’s Departments 2008-09, in which it expressed serious concerns about low morale and a lack of efficiency at HMRC. The report notes that:
"HMRC has an ambitious transformation programme to improve its efficiency involving a reduction in the number of people working for it, and a reduction and redistribution of the locations of its businesses. HMRC has already reduced the number of people in its organisation from 105,000 to fewer than 89,000."
The Chief Executive of HMRC, Lesley Strathie admitted to the committee that she accepted that she had an unhappy workforce that nevertheless seemed committed to stay with HMRC. GIven recent staff cuts those remaining probably comprise a mix of the truly committed and the truly awful who did not volunteer to go as part of the cut backs.

The Committee was justifiably concerned that "a disengaged workforce with poor morale" could impact performance - in terms of collecting all taxes that are due. Lesley Strathie recognised that her workforce needed clarity "about whether they have a future in the department and what that future looks like…" She also saw a need to build up the tax profession to "upskill and accredit our people." She acknowledged too that management needed to do more, telling the Committee that "many of our managers do not believe they need to change, and clearly we all need to change."

I think this is all rather worrying for accountants and for tax advisers. Ever since the Government announced its desire to cut staff at the newly merged HMRC we have been concerned about the professionalism and ability of those who would be left behind. Five years on and it is clear that, for those who remain, morale is at rock bottom, the pressure is greater than ever and the quality of service is generally low.

I have never been convinced that the so-called "transformation programme" bore any relationship either to modernisation, improved service to 'customers' or increases in the tax yield. The committee may well be right to blame senior management for the low staff morale within HMRC. Perhaps they could have done better. However let's remember that it was the Government who decided to decimate staff numbers, to close offices and to introduce complex new tax measures at short notice. I suspect that senior management are doing quite well given all of the obstacles placed in their way!

What do you think?


  1. Perhaps over-cynical, however, this seems typical to the governmental attitude to efficiency (the same attitude is sometimes found in large corporate environments, too).

    By reducing or minimising staffing, costs are reduced, thus efficiency is increased.

    Or not. Morale can be irreparably damaged and customer service tends to take a nose-dive.

    We strive for true efficiency - minimising beaurocracy and implementing tight business processes which help us to help our clients in the fastest, most reliable and most economical manner possible.

    I also tend to believe that there is an over-focus on the level of tax revenue generated - and not enough attention paid to reducing the cost of generating it!

  2. I think it is human nature to hanker after 'the good old days'; certainly this attitude prevailed during the years I personally worked for the Revenue.

    However what seems different now is the desire at the top to turn HMRC into little more than a 'processing factory'. I regularly speak to former colleagues, who (in all seriousness) tell me that only a very small minority of HMRC staff now know anything about tax! If you take away the only 'interesting' aspects of a job (leaving only the processing of computer generated targets etc) is it any surprise that morale has nosedived?

    One intriguing follow-up question is whether this lack of tax knowledge at HMRC will have a positive or negative effect on the accountancy profession? Arguably if you do know a bit about tax then your services should be in demand. However if HMRC is unable to (sensibly) enforce tax compliance, the long term result could be a reduction in both tax yield and demand for professional services.

  3. minimising beaurocracy and implementing tight business processes which help us to help our clients in the fastest, most reliable and most economical manner possible.
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