|When a Public Sector saving is just a transfer of costs to taxpayers|
A Public Accounts Committee report warns that further cuts to Government spending on personal tax services could trigger another collapse in customer service. In their report, the Committee raises concerns about plans by HMRC to cut the cost of these services by around a third in the next 5 years.
Customer service levels collapsed in 2014–15 and early 2015–16 as a result of HMRC underestimating the demand for telephone contact and reducing customer service capacity by releasing 5,600 staff. Average call waiting times tripled compared with previous levels and only recovered towards the end of 2015 after the recruitment of 2,400 new staff.
Taxpayers spent some 4M hours waiting for HMRC to answer the phone in 2015–16 and also incurred direct call charges while on hold, with every £1 saved by HMRC on telephone services over this period resulting in an estimated £4 in extra costs to customers.