HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Tuesday, 30 August 2011


My thanks to a loyal reader for alerting us to the this rather interesting piece of information.

"To add to the mix they are recruiting a new Head of Chief Executives Private Office (G6) and Private Secretary to the Chief Executive (G7) - both posts are currently filled by staff who came across from DWP when DLS got the job. So why are they advertising the posts again? Could it be that all three are transferring?"

The comment was made in relation to my article about Lesley Strathie's soon to be announced departure for pastures "new" in a civil service position where she will "champion the improvement of front line services across the Civil Service, and lead the development of the profession across government".

Clearly her two loyal retainers are leaving with her.

Anyhoo, with such a change at the top, this is as good a time as any to muse a while as to how we got to where we are now, and why the Grande Dame has failed (even though her "new" role will be used as a cover by the politicians to avoid the use of the word "failure").

by happen-stance a loyal reader reminded me about an article that appeared in the Guardian in February 2010, which covered Lesley Strathie's response to the damning review from the Cabinet Office (noting the changes that Excom had already made to improve processes and structures within the organisation - remember this was written in February 2010).

The Cabinet Office review was based on the results of the second people survey in 2009 (2010's results were in fact much worse). As can be seen from the article, Strathie's strategy was to "harness" the enthusiasm and talent of local management as a driver for change.

"No less than one would expect, of course, and a fair recognition that the right efforts have been made by those who will further drive her vision going forward. But, as any change expert will support, the main barriers to implementing change tend to be not the visionaries at the top of the organisation, nor the 'workers' as a complete group but those who see change as a threat to their career ambitions or a challenge to a comfortable status quo.

The wrong job, the wrong way, for too long

Staff within HMRC are well known for their tenacity and passion to do a great job. However, despite all the change that the organisation has undergone over the last few years, many still feel that they have been doing the wrong job, the wrong way, for too long. The key to successful change is usually to be found in engaging key operational staff, then motivating them to drive the whole process forward quickly and effectively.

This in turn requires a clear view, not just of the strategic goals but also a comprehensively-thought-through model for the entire new organisation, which encompasses vision, strategic performance measures, organisational structures, new projects and business-as-usual activities, together with the right combination of skills, competencies and behaviours needed by all staff.

More important than any of these areas individually is the need to demonstrate clear alignment between all of them. Research shows that organisations that do not seek this rarely achieve their performance goals; whereas those that do, often achieve 200%+ of their targets.

As Strathie recognised in her comments, top-down and bottom-up alignment are vital to the future success of the organisation.

If HMRC staff understand the organisation's goals at strategic and operational level, they will also understand how their own job contributes to those goals, and they are likely to be well-motivated and strive even harder to achieve their own targets.

The Cabinet Office review stated that at least one layer of management remains more likely to be focused on building the profile of their own area (and themselves) than looking out across the silos for the good of the department as a whole.

This is unlikely to change until they feel that their advancement is clearly linked to HMRC's overall success. Strathie's comments suggest that this will be one of the first areas to which she will turn her attention.

The answer for HMRC lies in governance, leadership and culture – harnessing the passion and work ethic of the majority of staff and persuading or redeploying those who see no need for change. The kind of detailed alignment model I mentioned earlier is at the heart of such a programme – but time to implement it fully is limited, given the proximity of the General Election which tends to change everyone's priorities.

One and a half years on, with worsening engagement scores, poor performance and Strathie's departure whilst still on sick leave, what went wrong with that strategy?

The reality of harnessing management enthusiasm and talent requires there to be enthusiasm and talent at management level, sadly this does not exist in bucket loads at that level in HMRC (as has been noted many times on this site, and as Excom are now realising).

Excom assumed they had the talent from SO and above to understand the strategy, they didn't. The recent capability reviews now show in black and white that HMRC is starved of talent at this level.

Why is HMRC starved of talent at this level?

Go back in time to when Gordon Brown was Chancellor, and when he was looking for efficiency savings.

The Labour government of the day moved swathes of the Civil Service to the provinces (oddly enough Labour heartlands!).

Many experienced HMRC managers opted to take the very generous redundancy packages, rather than move to the provinces. The result being an expanded set of regional offices with no managerial competencies.

To add to the mix, the merger of the Inland Revenue and Customs resulted in chaos; as managers with no experience of tax/customs were put in charge of people without understanding he reality of their day to day jobs (the buzz word was "pure management", a tax manager could manage a customs department and vice versa).

Promotion through "learning the ropes" disappeared, especially in Personal Tax due to the lack of experienced managerial talent. Inexperienced managers suddenly had to recruit and backfill (replace leaving managers), without understanding business principles or any oversight of their decisions.

This has resulted in personal fiefdoms being created where sycophantic jobsworths are in control (see the comments made on this site over the years by HMRC staff). Pacesetter was used/manipulated by the management dross to fortify their fiefdoms. Excom have belatedly realised that Pacesetter has been manipulated, but will not fully abandon it. Instead local management are being by-passed in an attempt by Excom to see reality.

Whilst it does not take that long to inflict damage referred to above on an organisation, rectifying it will take a very long time and will not be for the faint-hearted.

HMRC have committed to their political masters that the results of the staff survey in 2012 (due to be published in Q1 2013) will be significantly better than the current appalling results.

The sad reality facing HMRC is that removing the deadwood of underperforming management will take longer than a year, and positive effects on staff morale/efficiencies/tax take etc etc will not be evident by the 2013 deadline.

HMRC now face the very real risk of being declared "unfit for purpose".

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  1. "The Labour government of the day moved swathes of the Civil Service to the provinces (oddly enough Labour heartlands!). "

    This has been happening for 30 years. Both types of tories (red and blue) pursued this policy. It is cheaper to employ high quality staff in "the provinces" and they are less likely to leave after a couple of years for more money.

    Something puzzles me. Over the last month or two this site has gone from blaming senior civil servants for the problems at HMRC to blaming more junior staff. Apparently the poor people at the top don't know what is happening and it is all down to the evil/incompetent people below them - but not at AA or AO grade. Even the pacesetter bollocks isn't their fault.

    Why is this the only area of the staff survey that we seem to disagree with.

  2. Blimey Ken! You have been investigating this haven't you.

    Now lets see what has been happening to see how this stacks up.

    Level 1, 2,3 leadership capability review led to the departures of Kenny & Smith ( Hopson as well?). And now seemingly all the data points to the departure of Strathie as well. Wow. You and the coomentators on here were right all of last year!

    Level 4/5 review has been completed (well should be according to the Change programme pages on the intranet) so your previous posts about looking for changes at SMT may prove to be spot on as well!

    The loss of experienced managers from moving offices to the provinces? I think this is only partially correct, as from my vantage point (ex IR) we lost managers from the jobs cull following the merger. The combined C&E/IR headcount in 2005 was almost double the HMRC headcount today. So I agree that lots of very good managers from 2005 at both old departments are no linger there. I agree 100% about the replacements not being the same calibre though. ExC&E people seem to agree judging by posts here.

    Pure Management. Again I have to agree. Too many non entities that do do not command the respect of their staff.

    Overall, I find very little in your post to take exception to. Bit worried about the solution to this though. I fear you are correct when you say it will take a long time to fix this. But how and will it mean more Pacesetter?

    I thought you were going somewhere with all your posts about failure of management down the chain, it's only the Strathie leaving details, I assume, you were waiting for.

    How long have you been planning this post? You kept that Guardian article for a year and half to drop the bomb when Strathie left? You are committed Ken, I will give you that.

    I'm still re reading your post as it has so much to digest. Will post again when I have gone through it (and understood all the threads) later. Can't wait too which management troll tries to derail this :)

    Level 4

  3. Also, Ken or anyone else know when those capability reviews are to be concluded? It seems the first comment is saying that SCS are being portrayed as blameless, but my reading of the recent comments here seem to indicate that SCS realise they are crap? Otherwise, why so many changes at the top?

    One for the 3Cs eh :)

  4. "The Labour government of the day moved swathes of the Civil Service to the provinces" Not at the top of HMRC they didn't

    "Many experienced HMRC managers opted to take the very generous redundancy packages, rather than move to the provinces." Don't think so, Ken. have you got evidence to back this up?

    "The result being an expanded set of regional offices with no managerial competencies". Actually they concentrated Areas into Regions, so it wasn't extended, quite the opposite. Although I agree they were stuffed full of arse lickers

    Apart from that bang on!

  5. Ah well many of us could see
    the writing on the wall long ago and bailed out, now very happy that we did.

    And that writing said: "You are being managed by (i) those promoted from within the ranks of a bunch of elitist self satisfied failed academics with no real world experience and (ii) newcomers/consultants and associated toadies of same, promoted from within the ranks of a bunch of elitist self satisfied failed academics with no real world experience."

    I frequently have meetings with HMRC staff of varying grades and without doubt they are the most miserable and unhappy wretches, many of them trapped in a job they used to love but have come to hate because of the serial wasters and box tickers who sit above them playing numbers and "change management" games as a substitute for doing anything constructive

    It really is quite sad

    1. Its more than "quite sad" - it is totally sinister in a so-called civilised democracy, and a democracy that often boasts of its pride in the right to "free speech".

  6. I heard an interesting quote that may shed a little light on things.
    Evidently HMRC has recruited numerous "fast-trackers" who are next to fecking useless and are used to push through the increasing number of Stalinist management dictats.
    They are clueless due to a lack of life experience and are viewed as " expendable cannon fodder" by the hierarchy who use them to buffer the hoi-polloi from the effects of legislation.
    Out of court settlements or compromise agreements must have gone through the roof in an effort to keep Tribunal cases out of the public eye.
    Still, it will only take one publicised case to blow the lid off this dung heap as the staff have run out of patience, some fooled all the time, some fooled some of the time but not all fooled all the time thankfully.
    Keep up this momentum Ken, its been interesting to see the "toadies" have not got much to say about things, too busy covering ar@e@ I say!

  7. The next capability review is being carried out as we speak. It's more of a self assessment job this time around with HMRC being seen to self assess it's own capability. (It's already six months late so surely it's due for some late filing penalty... but one of the key players is right bobble-head who is widely ridiculed by most of us at 100PS so that's no suprise.)

    However, don't be surprised if the 2011 Capability Review reflects the Treasury Select Committee report (Why bother re-writing a whole document that says you're brilliant when the whole world knows that you're not.)

  8. Ken has launched the maroons and the Lifeboat is about to launch down the slipway, but to what avail?
    If it don't want rescuing not even a Lifeboat will help.
    Go back in time and look at the lead-up to this debacle.
    HMC&E lost so many high profile cases it went from World Class to remedial Class by way of LCB and more than a few other "classics"!
    Then came the great Mapeley sell-off, a national disgrace.
    The rest is history as they say through the totaly botched joining together of 2 government departments, staff surveys that plumbed new depths to MP's accusing HMRC managers of lying, to some of the worst reported cases relating to the public services ever published, including in the Daily Mail!
    And what next - a top-down clear out by the look of it, the special measures alluded to elsewhere obviously have had no effect.

  9. @ 19.15

    I'm interested in what you say. I am also somewhat perplexed. If the capability review is more of a self assessment, as you say, then why has the leadership if Personal Tax been replaced? Did they all find themselves incapable? I find this difficult to believe. If seems much more likely the removal of so many SCS was a result if executive action. Basically, they didnt jump, they were pushed.

    I would be stunned if there are not similar changes down the chain to G7 maybe even SO level.

    Otherwise, what is the point of the whole exercise if everyone is great at their jobs?

  10. @30 August 2011 21:48

    I don't think it was that kind of self assessment.

    What happened is that most HMRC management leaders (and I'm going to say, for arguments sake, those that operate a chain of command of about 500 or more staff and those that manage them and so on) were told to reapply for their own jobs. Those that were seen as ineffective got pushed rather than sideways moved this time round.

    I think (but can't be certain) that the exercise was purely aimed at management staff. I don't think they'd dare try it with the senior compliance inspectors that occupy the same pay grade, they seem to be slightly more feisty and competent than their management counter-parts and rather than just hide behind a smokescreen of statistics they know they are competent and can cut their losses and go for a job elsewhere and utilise their skills.

  11. @06.35

    I understand what you are saying. Basically a competency review kept in-house, as it were.

    Well, it's progress of sorts as it acknowledges that there is a problem somewhere. The administrative grades are under the cosh most of the time because of Pacesetter targets and the free rein given to the Officers.

    What is concerning from a wider Civil Service point of view is that the people deemed to have been unsuccessful in the review could end up up taking their brand of "management" to another Department. The problem is not really solved. It is simply parked elsewhere for someone else to deal with. That can not be right, surely?

  12. @31 August 2011 09:19

    You are right about the shifting to other civil service departments. A lot of the current management were part of the next biggest civil service department after HMRC and after they had apparently increased productivity and decimated service levels they somehow got jobs at HMRC.

    As someone has already alluded to in a comment a few blogposts down, there are too many layers of management in HMRC (most of them created around about the merger) meaning any hint of transparency becomes inherently blurred.

    I am only mentioning this to try and address the concerns you may have about these managers being exported. Most civil service departments are a lot smaller than HMRC/DWP/MOD etc. meaning that the senior management suddenly become far more visible to their staff (and their ineffective practices will become identifiable far quicker) than they would in a large organisation such as HMRC.

    I'm not sure if that's any comfort but remember HMRC management relies on the fact that most of its staff are clerical grades rather than professional grades and that's not the same for some of the other civil service departments. They will find that their bullying practises are far less effective there.

  13. It is amazing what opportunities exist for the malevolent individuals in this day and age. Create an impenetrable wall of managers ( if you are an AO, there are 5 layers above you before you reach G6 and this is just local management!), then create another impermeable layer if management via Pacesetter processes. Thus acts like a buffer between the administrative grades and manage
    Net up the chain as all "communication" us via the data on the boards. If it's green, everything is fine, if it's red, work harder. If something is wrong, 3 Cs. Be quiet at the back, pacesetter is your friend.

    By the by... Pacesetter 3 cs are being overhauled. Sycophants appointed as CIP champions (continuous improvement process), after having renamed the failure of the "Golden Key", as CIP was formerly known.

    Now each team in an operational "leaned" environment will have a volunteer champion to be called a "Wizard". I shut you not!

    And people wonder why HMRC is Shite. Management, management, management!

  14. Apologies for the typos above. I'm sneaking this out in a smart phone and predictive spelling is like pacesetter. Fine in theory, less than ideal in practise. Sorry.

  15. @1 September 2011 10:00

    I remember the days when I tried to raise things through 3C's. Metaphors involving hard brown icky stuff come to mind.... (Oh no! Someone below me came up with a good idea.... how can I make it seem like mine? I can't? Oh well better ignore it then....)

    Thankfully I am now on a 'battalion' where the Band O FLM's have come to the realisation that raising things through their management chain is useless and have a pretty good idea when to feed things up diagonally or in a snake pattern rather than vertically.