UK's Inland Revenue Lauded With Faint Criticism

Jeremy Hetherington-Gore, Tax-News.com, London

03 January 2001

A report on the Inland Revenue produced under the Government's Modernising Government programme was published on the Revenue's web-site just before Christmas at:

http://www.inlandrevenue.gov.uk/about/peer.pdf

The seven authors were led by Chris Kelly, the then permanent secretary at the Department of Health. Other members included Andrew Dilnot, Chief Executive of the Institute for Fiscal Studies, two other Government officials, and what appear to be external consultants.

The report has a curiously obsequious tone, no doubt the result of giving leadership to a civil servant, and leaves no stone unturned in its effort to find things to praise. No wonder that the Revenue says it accepts the need to make improvements, but that the overall tone of the report is positive. "We are reasonably happy that the report was positive," said the Revenue, "The recommendations that it has made are being taken seriously." Yes, Minister.

Another odd thing about the report is that it is called a 'peer review'. Andrew Dilnot qualifies, but surely the peers of the Revenue's management would be tax management in business or the profession? No sign of them, and the reason is not far to seek, since there has been a chorus of complaint from the Revenue's 'clients' about the inadequacy of its planning and implementation of tax changes.

At least the report does criticise the Revenue for inadequate consultation, pin-pointing:

Consultation happening too late in the process to offer external stakeholders a real opportunity to affect policy outcomes; and
Involving what was seen as unnecessarily restrictive approasches to what was being consulted on.
The report also notes the extent to which the Revenue uses the Finance Bill as a prescriptive list of changes, rather than attempting to implement the underlying policies which the Finance Bill all too palpably fails to articulate in most cases.

There is nothing about the Internet (amazing!) and most of the report's conclusions are woolly, without specific recommendations, for instance:

'The Inland Revenue lacks consistency and analytical depth in the way it makes tax policy';
"At its best, the policy-making function in the Inland Revenue works very well, but it does not always meet the high standards to which it aspires."
"The Revenue has some real strengths but high-quality analysis is not as common, nor as highly valued, as we believe it should be".
The report says that staff training in economics and numeracy is inadequate, and that the Revenue ought to appoint a "champion of analysis" at board level. The report identifies the lack of a person responsible for overall strategic policy direction, adding ministers would value someone acting in such a role: "It remains difficult to identify anyone in the structure who has the background and the capacity to think about the tax system as a whole."

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