Overview: HMRC unsettled

The merger of the Inland Revenue and HM Customs and Excise in 2005 spawned a
new era for taxation in the UK. Since then, however, it has become apparent the
department is overstaffed, and suffers from both low morale and a lack of
clarity about leadership.

The ambiguity surrounding the departure and subsequent payout of HMRC’s chief
finance officer, Stuart Cruickshank, has merely served to highlight a government
office struggling to maintain its sense of direction.

What’s happened?

Last week, Accountancy Age reported Cruickshank’s £88, 000 golden
goodbye, despite his leaving by ‘mutual agreement’.

In heated exchanges at the House of Commons Treasury Sub-committee, George
Mudie, Labour MP, cross-examined former acting chief executive Dave Hartnett
over the payment.

‘If he wanted to go, why the hell did we pay him £88,000?’ Mudie asked.

Both Hartnett and Mike Clasper, the new chairman of HMRC, struggled to
explain the payment.
Hartnett said he had wanted to go, but not necessarily ‘at that time’, but it
still left the question of why he was paid so much despite expressing a desire
to leave.

The payment is unlikely to go down well at HMRC, where staff morale is low,
as a series of surveys have shown.

The sub-committee indicated it was concerned by the frequency of change to
senior managerial positions and the implications this could have on staff
morale.

Key positions of chief executive officer, chairman and CFO have all changed
hands over the past two years.

A recent HMRC winter survey of staff showed just 10% of employees believed
change is managed well by the board and only 15% said the department offers
effective leadership.

What’s going to happen?

The details of Cruickshank’s payment are set to be further probed. HMRC must
send a note to the committee to explain itself better, and the next time the top
brass are quizzed by the committee, they are likely to have to justify their
decision.

As for morale, HMRC is releasing a statement outlining the department’s
objectives for staff.

‘That’s the start of the process, not the end. We’re looking at the obstacles
we have and there are many,’ Hartnett admitted.

Key staff are set to be recruited too. A replacement for Cruickshank is due,
Clasper said at the committee meeting.

And on top of that, Clasper is looking to recruit a new head of HR. The job
spec? To inspire tens of thouands of demoralised staff, and make a few thousand
redundant too.