Digital Leaders Blog

A fascinating new report has just been published looking at digital transformation at HMRC, the UK tax authority.

The report catalogues a series of errors which, it is claimed, have resulted in near meltdown of the UK tax system. There are very important lessons to be learned here for other public sector transformation projects; indeed for the private sector too.

Keynote Summary

  • HMRC launch a 'Building our Future (BoF)' programme to become the most ‘digitally advanced’ revenue service in the world. The core ‘vision’ is to replace phone and postal enquiries from members of the public and small businesses with automated online services. This will release staff from boring administrative tasks, processing forms or speaking with taxpayers. As a result staff will be freed up to work on more complex issues and retrained to tackle tax avoidance and evasion.
  • At least that was the 'spin'. The reality was thousands of redundancies and the closure of 170 HMRC offices located around the country.
  • Unfortunately the forecasts were wrong. The public kept calling and mail kept arriving. The reductions in staff numbers meant that the department became overwhelmed and standards of service to taxpayers collapsed.
  • To compensate for these failures management responded by heaping yet more pressure on staff, introducing a system of staff appraisals called performance management review. This and other management initiatives have simply led to more time lost to form filling and administration, further damaging the department's capacity to tackle tax evasion.
  • As a consequence of the above, the report argues that HMRC is at breaking point.
  • One of the main reasons for project failure is that improvements in service quality have never been at the heart of HMRC’s transformation programme. The primary driver of change has been to cut costs.
  • The report concludes that failure of 'Building our Future' poses a serious risk to tax collection in the UK, and with it, our public services.

A more detailed summary of the report can be found here.

You can download the full report entitled 'HMRC, Building an Uncertain Future' here.

As always, comment and feedback most welcome.

Take care.

Jim H

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