HM
Revenue and Customshas suspended its main
board after an external review highlighted leadership failings and
loss of public confidence in the wake of itsloss of two CDs containing child benefit data on 25 million
people.
An interim panel of advisers from the private sector will help
to oversee the department of 85,000 people - working in 600 offices
- which keeps computer files on more than 30 million taxpayers.
Chancellor
Alistair Darling faced an outcry in November last year when he
announced that two unencrypted CDs had gone missing after HMRC
officials sent them to the National Audit Office by courier.
The incident raised questions about data security at HMRC and
the need across the public and private sector to encrypt personal
data on CDs and mobile services.
Since the incident came to light, three non-executive directors
of HMRC have stepped down, one director has resigned and another
has moved to another job. The acting chairman of HMRC, Paul Gray,
was moved to another Whitehall role.
The reorganisation follows a Capability Review which highlighted
fundamental weaknesses in leadership at HMRC in December 2007.
The review was carried out by Peter Ellwood, chairman of ICI,
Tim Godwin, assistant commissioner of the Metropolitan Police, and
others. It pointed to the loss of child benefit data and said, "The
most important challenge for HMRC will be rebuilding trust and
confidence among its staff, customers, agents and stakeholders.
This will be a significant task given the size of the customer
base, which includes over 30 million individual customers and four
million business customers."
The review criticised "significant gaps" in management
information and described HMRC as "information-rich" and
"intelligence-poor". It found that the department was "strong" or
"well placed" in only two of 10 areas assessed. The biggest
weaknesses were in setting direction, igniting passion, basing
choices on evidence, and developing clear roles, responsibilities
and delivery models.
It said, "The top team lacks the right kind of external support,
expertise and challenge to carry out its responsibilities
effectively." Only 12% of staff said that HMRC was well
managed.
The new advisers will sit on a board called the Executive and
Advisers' Committee. The chair of the committee is the existing
acting chairman of HMRC, Dave Hartnett. Some members of the old
board will also sit on the new committee.
Hartnett said HMRC had decided to "pause the board in its
current format and to appoint an interim panel of advisers for six
months, allowing a shift in focus and skills".
HMRC is seeking applicants for two new top jobs created by
Darling and Cabinet secretary
Gus O'Donnell. The new posts are non-executive chair and chief
executive.
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