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National Audit Office Press Notice

HM Revenue & Customs’ transformation programme

THIS STATEMENT IS NOT FOR PUBLICATION OR BROADCAST BEFORE 0001 HOURS ON FRIDAY 18TH JULY 2008

Report by the Comptroller and Auditor General
HC 930 2007-2008
18 July 2008
ISBN: 9780102954241
Price: £13.90

Eighteen months into an ambitious programme to transform HMRC, the Department has spent £851 million and achieved estimated benefits of £2.4 billion. These benefits are mainly from activities already underway when the programme began. Changes to funding have led the Department to revise and postpone parts of the programme, and the overall benefits expected carry high levels of uncertainty.

A report out today by the National Audit Office found that most of the £11.5 billion benefits are expected to come from an increased tax yield (£6.3 billion) and transaction savings to business and government (£4.1 billion). The estimate of additional tax yield is volatile and assumes collection in full.

The Department has made progress in developing its systems and processes and enhanced its project and financial management skills to deliver the programme. For most programmes it has developed governance processes and set out responsibilities for managing the projects. It delivered, as planned, one major programme in the first 18 months and has implemented parts of other programmes. It is taking action to improve implementation plans and milestones, risk management and contingency plans for some other programmes.

A major driver of the programme is the Department’s targets to achieve efficiency savings of 5 per cent a year. Changes in funding and content of the programme during 2007-08 delayed the completion of the business cases for individual programmes. The Department has approved business cases for 10 programmes and plans to complete the remaining three over Summer 2008. Finalising the component parts of the transformation programme is a critical step, particularly as the Department expects the funding available to peak in 2008-09 and reduce thereafter.

Changing the culture of the Department to become more customer-focused is an important part of the programme. In any change programme staff satisfaction might be expected to decline and recent surveys indicate morale remains at a low ebb. The Department needs to more actively demonstrate the benefits to its staff and manage the expectations of customers as many of the improvements for them are scheduled for 2011 and beyond.

Tim Burr, head of the National Audit Office, said:

“This is an ambitious programme of change with the potential to provide significant benefits in terms of tax yield and improvements for the Department’s customers. To succeed the Department must determine what it expects the programme to achieve with the resources available. It should also establish that the planned benefits are realistic and confirm each year that those achieved are robust.”

Notes for Editors

  1. HMRC plans to spend £2.7 billion from 2006-07 to 2010-2011 on a programme to provide a more efficient, customer-focused organisation, making it easier for taxpayers and claimants to fulfil their obligations and for the Department to detect and deal more effectively with wilful non-compliance. It expects to achieve benefits valued at £11.5 billion.
  2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  3. The Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 36/08
All enquiries to Donna Watson, NAO Press Office: Tel: 020 7798 7038
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