Concern over HMRC attempts to constrain directors' public speech

HM Revenue and Customs is under fire from parliamentarians for apparently attempting to stop board directors revealing the full extent of its challenges.

HM Revenue and Customs is under fire from parliamentarians for apparently attempting to stop board directors revealing the full extent of its challenges.

The attempt by HMRC to constrain the comments of its most senior executives came after the department's chief information officer Steve Lamey revealed at a public IT conference in May how the department needs to tackle a series of deep-rooted failings.

Lamey said that data on taxpayers was of poor quality, and that about 35% of the letters sent out by the department were returned, and millions of self-assessment forms were dealt with so quickly that although about 48% were processed correctly the first time the rest needed to be reworked.

The HMRC CIO added that he was seeking to establish "killer KPIs" - key performance indictors - to make the administration of HMRC cheaper to run, more effective, and more responsible to taxpayers.

His comments were published in Computer Weekly, picked up by national newspapers and a denial was issued by HMRC.

A few days later board members of HMRC were warned to be careful about what they said in public, according to minutes of a meeting of the department's Executive Committee. The message was given by the department's chairman David Varney after discussions with ministers.

Last week a spokeswoman for the Revenue denied there was an attempt to gag senior directors.

"No one wants to prevent directors from freely and openly giving views and information. David Varney was reminding all Excom [Executive Committee] members of the need, when speaking in a public forum, to ensure that they present what is said in such a way as to minimise the potential for misunderstanding or misinterpretation."

But MP Richard Bacon, a member of the House of Commons' Public Accounts Committee, said that Varney's reminder to directors could be seen as an attempt to gag them after Lamey's outspoken comments.

"It was refreshing to have a senior IT specialist, who is familiar with the business issues, and who is prepared to identify clearly what the scale of the problems is. Unless you've got that degree of frankness and candour, I don't think you're really going to solve the underlying problems.

"The alternative is to be in denial, to suggest that the problems don't exist. It is plain that they do."

Shadow Treasury minister Baroness Noakes, who is a former partner at KPMG, said she was concerned that it was already hard for parliament to discover how well HMRC was managing its business.

She said HMRC was "apparently silencing people from telling the truth".

She added, "Speaking the truth [in the public sector] in the way you do in the private sector may well not be as acceptable."

This latest criticism comes at a particularly difficult time for HMRC. It is struggling to integrate two major departments of state - Inland Revenue and Customs. It has a new senior management team charged with bringing experience of industry to Whitehall and is 12 months into an outsourcing deal with Capgemini.

It is also fighting a series of IT-related disasters. These include the delayed introduction and problems with the Eric system to fully validate online PAYE returns, highly publicised difficulties with its online self assessment systems and incorrect payments of tax credits.

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