"In recent years HM Revenue and Customs has adopted a
more structured approach to improving its administrative processes.
The significant reduction in staff deployed on National Insurance
work demonstrates how reforming processes can deliver savings for
the taxpayer.
"HMRC now needs to stand back and establish how best to
administer the National Insurance system in the future so that it
delivers the required levels of accuracy at a minimum
cost."
Amyas Morse, head of the National Audit Office, 30 June
2010
HM Revenue and Customs has taken significant steps to improve
the efficiency of National Insurance administration. It has managed
to reduce staff numbers substantially while avoiding any major
operational failures. However, HMRC needs to demonstrate more
clearly that it is providing value for money from the £350 million
it spends each year and take advantage of opportunities to secure
further savings.
Each of the main operational areas within HMRC has successfully
reduced the number of staff employed on National Insurance work.
Staffing levels fell by between 16 per cent and 31 per cent between
2006-07 and 2009-10. In the area of HMRC with responsibility for
maintaining National Insurance records there were 1,200 staffing
reductions. But HMRC does not have a clear picture of the total
costs of the system and how these have changed.
During the period of change there have been no significant
operating failures across the system of collecting and recording
National Insurance contributions. Furthermore, there are examples
of significant increases in productivity in processing information.
However, HMRC has not achieved all of its National Insurance
performance targets. In particular, while it has improved its
accuracy in processing data, in 2009-10 the Department achieved 93
per cent accuracy against its target of 97 per cent.
There are a number of ways in which HMRC could improve how the
system of National Insurance functions. On accuracy, HMRC needs to
ensure standards of accuracy for National Insurance records are
applied consistently across all operations and take account of the
longer term costs and consequences of inaccuracies in processing.
On efficiency, although some improvements would depend on the
availability of funding for IT enhancements, considering the system
in its entirety would help secure savings.
Publication details:
HC: 184, 2010-2011
ISBN: 9780102965308