HMRC faces probe on 9,000% rise in consulting spend

The spending by Her Majesty’s Revenue and Customs (HMRC) on consultants has risen by 9,000%, while customer service has plummeted. The increase, which has been described by MPs as a “staggering” figure, has prompted calls from Parliamentarians for an investigation into the tax authority’s growing dependence on external advisors.

Members of Parliament have called for an investigation into HMRC’s use of external consultants, following the publishing of official figures which showed found its increased reliance on them for its IT systems had boomed in recent months. In April 2018, HMRC spent £844,188 on consultants – an eye-watering figure by its standards, and the highest monthly amount since 2011 and more than HMRC’s entire annual spending on consultants in 2015, amounting to an almost 9,000% increase on the £9,618 spent in the equivalent period that year.

The full figures, which included a £2.1 million splurge on consultants in 2018’s first four months, equating almost 2017’s yearly total, and HMRC will subsequently be the target of a probe on the matter. Labour’s Frank Field, who chairs Parliament’s Work and Pensions Select Committee, branded the spending by the tax authority “staggering,” adding, “It shows there is something much more basically wrong here. I will be asking the National Audit Office to look at each of these contracts.”The probe comes at a difficult juncture for HMRC, having significantly cut down staff and resources over the past five years as part of continuing saving drives – part of the broader austerity policy of the incumbent government. Instead, however, the department has come under scrutiny for simply spending the money saved on big-name professional services firms, similarly to the Civil Service which has been accused of using consultants to paper over the cracks in an organisation under strain from a heightened Brexit workload.

In the case of HMRC, however, the figures also make for difficult reading as they come hot on the heels of an exposé from the Daily Telegraph, which found more than four million calls to HMRC are going unanswered. More than one in 10 callers to HMRC presently fails to get through to anyone, compared with just over one in 20 a year ago, provoking the further ire of MPs, who suggested that the service is letting down millions of self-employed people, individuals often labeled as the growth engine of the economy.

Commenting on its consulting spend, a spokesman for HMRC said, “Our spend for the 2017-2018 tax year was over 90% lower than it was in 2009-2010 and less than a fraction of one per cent of our total spend with suppliers.” HMRC added that it believes it has improved its overall call-handling performance following previous criticism.

HMRC had spent £47 million on consultants in 2009-2010, before a Cabinet Office-led programme forced it to slash its spending from 2010.