Public Accounts Committee chair Sir Geoffrey Clifton-Brown has defended the committee’s “right to raise concerns” after HMRC permanent secretary Jim Harra took issue with its report on the department's customer-service levels.
The committee published a report yesterday on HMRC customer service in 2023-24, based on the National Audit Office’s analysis, as well as the committee’s own evidence from correspondence and hearings.
MPs warned in the report that the tax agency has been “too willing to let its telephone services fail in the hope this forces people to use its digital services instead”.
In response, Harra issued a statement saying the criticism was “completely baseless”. He also wrote a letter to the committee where he said was “disturbed” by the claims that HMRC is “deliberately degrading its customer services performance as a matter of policy and that service levels continue to deteriorate”.
The perm sec said these claims “expressly contradict” the oral evidence he and his colleagues provided to the committee at a hearing on 28 November.
“I refute these claims in the strongest terms,” Harra said. “HMRC has always deployed its available resources to maximise its performance across all customer services channels and continually strives to meet its service standards.”
Harra said the declining standards of the department's telephony customer service in 2023-24 were caused by a growing taxpayer population with more complex needs and budget constraints.
He said the extra funding HMRC received in May enabled the department to recruit more customer service advisers, and led to “strong progress” in improving its performance.
Harra pointed to HMRC answering 69% of calls to advisers in the first eight months of 2024-25. He said this is “below our service standard” but “shows strong progress in improving telephony performance during the year”. Harra added that, in October and November, HMRC met its target service standard of 85% of phone calls to advisers being answered.
Responding to the letter, Clifton-Brown said he was “disappointed” by the correspondence and that “the appropriate way to respond to a report from the Public Accounts Committee is in detail through the Treasury Minute process”.
Defending the points made in the PAC report, Clifton-Brown said: “It is reasonable for the committee to raise concerns and draw inferences from the evidence it receives”
Setting out the reasoning behind PAC's criticism, he pointed to three findings in the National Audit Office’s report:
- “HMRC has increasingly sought to restrict the supply of telephone services to manage its workload, with the aim to answer mainly complex queries and deflect more simple queries to digital channels”
- “HMRC initially used deflection messages to advise customers of digital services, but it is now also ending some calls after playing a deflection message where it believes a customer can resolve their query online instead. Customer satisfaction for those who heard a deflection message has been low, and HMRC does not currently know how many of these customers succeeded in resolving their query online.”
- “During 2023-24, HMRC stopped or restricted the calls it would handle on four of its helplines. Its reasons included encouraging customers to use digital services instead and releasing staff to improve overall customer service, including tackling processing backlogs to reduce customers’ need to check on progress.”
Clifton-Brown said these findings “strongly indicate a focus on degrading the phone service rather than on addressing its failings”.
He said the committee could also have pointed to “the long-term decline in customer service performance without corrective action being taken" and that the attempted closure of phone lines was “arguably a doubling down on service degradation on top of reduced call handling performance”.
Clifton-Brown added that the department’s policy to cut off customers who have waited up to 70 minutes to speak to an adviser is “completely unacceptable in any circumstance”.
He also questioned Harra’s argument that it is wrong to say service levels continue to deteriorate.
“The report is clear that references are to performance up to 2023-24 and that it was worse than before,” Clifton-Brown said, noting that the NAO report – which was signed off by Harra – found “clear downward trends in performance over time”.
Clifton-Brown said the 69% call answer-rate from April to November 2024 was a “small improvement” on the 66% average in 2023-24 and “still considerably below the 85% standard”.
He added that the likelihood of there being significant overall performance improvements in 2024-25 “seems especially low given that this potentially unrepresentative snapshot excludes the figures from the challenging period in the run up to the self-assessment deadline" of 31 January.
The PAC chair also noted that the improvement in October and November to an average of 85% of calls answered is “only over a short period” and said it was “not sufficiently complete or persuasive data to undermine my committee’s view of longer-term deterioration of service from HMRC”.
Clifton-Brown said he is looking forward to receiving HMRC’s full and considered response to the substance of the committee’s recommendations within the next two months and urged Harra to “take seriously” the committee’s recommendations to put customers’ needs at the heart of its decision making and allocate sufficient resources to customer service.