South Norfolk MP Richard Bacon has said that HM Revenue and Customs needed to ‘get real’ over an £11.5 billion business transformation scheme that a new report has called ‘highly ambitious’. Mr Bacon said today: “HM Revenue and Customs has begun a £2.7 billion transformation programme which aims to realise an estimated £11.5 billion of savings”.
HM Revenue & Customs (HMRC) plans to spend £2.7 billion from 2006-07 to 2010-11 on a transformation  programme to improve its services and detection of non-compliance easier.

“This estimate includes an increase of £6.3 billion in the tax yield and some £4 billion of transaction savings”. 

“However, the estimates are based on the increased tax yield being collected in full and transaction savings which have not been validated yet.  This is hardly solid ground for a multi-billion pound savings drive”. 

“The report could not be clearer: a programme of this size and complexity needs realistic planning.  If the mandarins at HMRC think using sketchy and volatile estimates is the way to drum up serious savings, they need to get real”.

Mr Bacon was speaking as the National Audit Office published its report into HM Revenue and Customs’ transformation programme.  HM Revenue & Customs (HMRC) plans to spend £2.7 billion from 2006-07 to 2010-11 on a transformation programme to improve its services and detection of non-compliance easier.  As a result of this programme, HMRC expects to achieve benefits valued at £11.5 billion by 2011.   

Most of the £11.5 billion benefits are expected to come from an increased tax yield of £6.3 billion and transaction savings to business and government of £4.1 billion.  

However, the report finds that the estimate of additional tax yield is volatile and assumes collection in full. HMRC also has yet to assess customer benefits for some programmes and fully validate the £4 billion transaction savings. 

The report identifies realistic planning as an issue and recommends that HMRC sets out more clearly what change programmes can realistically achieve, and establish a clearer list of priorities.

18 July 2008
 

See also::
NAO REPORT: HMRC’s transformation programme