Pointing to internal HM Revenue and Customs figures which show a backlog of 1 million items of post across the department, the union representing public sector workers has warned that the HMRC will "not be fit for purpose" within two years if it goes ahead with plans to cut thousands of jobs in a cost-cutting exercise.
The warning by the Public and Commercial Services Union comes as HMRC considers closures and job cuts on top of its planned 12,500 job losses, to meet a government target of achieving annual cost savings of GBP30 million by 2008.
The union reacted angrily to the news that over 200 processing sites would be closed across the UK by 2011 and that other offices would close and jobs go as a result of HMRC's desire to cut its budget by 15% from 2008 to 2011.
HMRC claims that the "modernisation" plans will result in a more "efficient and effective" service to taxpayers, but the PCSU says that the cuts would exacerbate a mounting backlog of self assessment tax returns, P45s, tax credit repayments and tax codes, and would not only reduce the quality of service to the public and businesses, but also undermine the Treasury's ability to collect revenues.
"It is foolhardy in the extreme to think that cutting more jobs and closing more offices will improve service levels in HMRC," commented Mark Serwotka, PCS general secretary.
"With a backlog of 1 million items of post already stacking up...further cuts will damage service levels...leaving HMRC unfit for purpose," he stated.
According to Paul Gray, Acting Chairman of HMRC, the latest proposals set out "the modernisation and transformation that HMRC wants to undertake over the next five years to put our taxpayers, claimants and other customers at the heart of everything we do, thereby improving efficiency and effectiveness".
"The creation of HMRC, where Customs and Excise and the Inland Revenue were integrated, means the new organisation now has more space than it needs," he noted.
"We are taking the opportunity to save taxpayers' money by operating with fewer buildings in a more co-ordinated cost efficient way," he added.
HMRC is due to commence a programme of consultations on the proposed cuts in December.
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