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HMRC’s programme aimed at streamlining business operations has boosted productivity and had some positive effect on staff, but it has some considerable way to go to become value for money, claims a report from the National Audit Office (NAO).
The document, published today, praises the Revenue for its ‘pioneering’ use of process-improvement techniques through the PaceSetter initiative, which was launched in 2006 in a drive to eliminate waste, inconsistency and duplication, while improving leadership and morale and exploiting fewer resources.
However, the extent of overall efficiency enhancements is not clear, says the NAO, because the key principals are not being applied strategically across the entire organisation – and the level of worker motivation remains lower than the average across government departments. Nevertheless, PaceSetter has had a minor positive influence on frontline employees, judging by figures from HMRC’s staff engagement index.
More troublingly for the audit office, the Revenue does not have a full understanding of the costs incurred in implementing PaceSetter, because the taxman decided to monitor some of the expenditure while excluding others parts, including the salaries of the programme’s leaders.
Analysis undertaken for the NAO suggests that a more complete assessment of costs brings the total spent on consultancy, equipment, staff and travel costs from the Revenue’s estimated £55 million to at least £115 million between 2005/06 and 2010/11.
‘There is evidence that changes initiated… to streamline business processes have led to some significant increases in output per person per day and enabled reductions in staff – but there are uncertainties over the full extent of the financial benefits from the programme and the extent of improvements in efficiency,’ states the report.
NAO head Amyas Morse added, ‘PaceSetter is travelling in the right direction, but not fast enough. After five years, HMRC’s approach to process improvement should be better measured, more sophisticated and more ambitious.’
The office’s latest report is part of a wider audit of the Revenue. It follows last week’s accounts document that showed the department was investigating 2,700 tax disputes with the UK’s biggest businesses as at 31 March this year.
