.png)
.png)
An ongoing programme of jobs cuts helped play a major part in HMRC exceeding their cost-savings target for 2011/12, according to a report by the National Audit Office (NAO).
The new document, published today, shows the Revenue slashed its spending by £269m over the 12 months to 31 March 2012 – 19% more than the anticipated £249m – while at the same time maintaining performance in key areas such as tax collection and reducing tax debt.
A reduction of £140m was made by axing 2,400 fulltime-equivalent members of staff and improving productivity among the remaining workforce through fewer management layers, more efficient work processes and the trimming of sickness absence.
The department plans to have lowered its running costs by £950m between the government’s 2010 spending review and the end of the 2014/15 tax year. It expects to see the loss of 10,000 fulltime-equivalent employees and 300,000 square metres of estate.
But the NAO warns that HMRC will have to make “more and deeper reductions… while increasing tax revenues, improving customer [sic] service and introducing its real-time information project and changes to benefits and credits”.
At September 2012, the Revenue was on track to exceed its 2012/13 cost reduction target by £29m, but change projects are saving around £66m less than forecast – and the taxman at July 2012 had not fully worked out where additional savings in 2013/14 and beyond would come from, according to the audit office’s report.
NAO head Amyas Morse said the tax department was “moving from making tactical efficiency savings and quick wins towards a more strategic approach to managing its resources.
“We recognise the importance of this change and note that HMRC is addressing… recommendations in the process. The big challenge ahead will be to make more and deeper spending reductions without impairing performance,” Morse added.
