Senior management at HM Revenue & Customs has failed to inject pace, confidence and dynamism within the department, an influential report has found.
The Capability Review, undertaken by cabinet secretary and head of the Home Civil Service Sir Gus O'Donnell, found a department that is set to meet its efficiency savings but is short on seven of its ten service-level targets.
Middle managers are unclear about what the senior management's vision for the department's future. Only 17% of middle managers think senior management is effective at leadership.
'The department needs to address a disconnect… about the ability of HMRC to set direction,' said the report. A restructuring of the department's management lines and responsibilities is required, it said.
The role of former CIO Steve Lamey, now COO, must be clarified, and the board should have separate roles for a chief executive and non-exec chairman.
A complicated 'matrix-management' structure at the department and extensive use of sub-committees has 'diffused accountability', leading to an increase in risk of errors being made further down the organisation.
In light of this finding and PwC chairman Kieran Poynter's ongoing review of HMRC's data security, the department has already begun to change its structure, said acting chairman Dave Hartnett.
'We will now create a simpler structure so that everyone understands who is responsible for what,' said Hartnett.
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