"Next Steps" (Hansard, 6 March 1992)

§ Mr. Norman Lamont

On 1 April the Inland Revenue will be setting up within the Department 34 executive offices covering the whole of its operational work in assessing and collecting taxes, and also important internal support services. This follows the establishment of the Valuation Office as an agency last year. As a result, the Inland Revenue will then be operating on "next steps" lines, with 96 per cent. of its staff working either in the Valuation Office Agency or in the 34 executive offices. This will mean less direct involvement from the centre, and320W more responsibility and accountability for heads of executive offices and their local managers. The purpose of these changes is to give taxpayers a better service, and to organise work more efficiently.

As a part of its major programme of change the Revenue set up two teams to review its organisation and structure and its management and grading. The principal aims were to achieve significant further improvements in service to the public, in operational effectiveness and in cost efficiency, and to ensure the fullest commitment of those who work in the Department. They have now completed their work. Copies of a summary of their reports will be placed in the Library.

The review teams envisage a slimmer and rather differently organised Department. Their proposals are designed to carry forward the policy set out in my right hon. Friend the Prime Minister's statement of 16 May 1991 on the Fraser report, in the Citizen's Charter and in the White Paper "Competing for Quality."

A number of the changes, if implemented, would take several years to complete. As a result, in 10 years time the Department might be 10 to 15 per cent. smaller than it is now. Further detailed planning and consultation will, however, be required before the future shape of the Department, and the way it does its work, can finally be settled. In addition to consultation with staff, the Inland Revenue is undertaking a major survey of taxpayers' views to ensure that the new arrangements properly reflect their priorities.

Meanwhile, however, there are a number of specific changes which we shall be carrying forward now.

First, the Inland Revenue is already engaged in introducing or testing a number of changes which are designed to improve the service it provides. We shall want to expand on this by examining proposals for moving, over a period of years, towards a new office structure. Taxpayer assistance offices would provide better local facilities, where the public could get inquiries dealt with, and problems resolved, on the spot. Other offices would deal with specialist and compliance work. And service offices would bring together, in a more efficient way, the bulk of the day-to-day work. Our aim is to move towards a single point of contact for every taxpayer. These changes will build on the existing experiments designed to remove the need for separate tax and collection offices in the same area.

Secondly, the Department will be taking forward for wider consultation—and, where appropriate, negotiation —proposals for a new performance and reporting system for staff of the Inland Revenue, and, linked to it, a new system for pay and grading, with a larger proportion of pay depending on an assessment of performance. These proposals would be consistent with moving to a single staff group, within the civil service, for most Revenue staff.

Thirdly, there will be a number of important changes to the relationship between the Department's head office and the new executive offices, in accordance with "next steps" principles. These include enhancing further the delegated authority and responsibility of managers; identifying opportunities to improve efficiency through market testing and internal charging; shortening lines of accountability and management; and making changes in management and reporting arrangements, including bringing operational functions more closely together.

Fourthly, to assist the Board of the Inland Revenue in managing the new departmental structure, a new 321W management board will be formed, comprising the existing board members, other senior managers, and a number of members from the private sector in a part-time capacity. These last will impart valuable management expertise, experience and advice.

These changes represent together an important new beginning for the Inland Revenue. It will become a slimmer and more effective organisation, more interesting and satisfying to work for, providing ever better service to the public.