Taxman’s spending on consultants soars as customer service dives

THE taxman’s spending on consultants has risen by a “staggering” 9,000 per cent, while customer service has plummeted. MPS will call for an investigation into HM Revenue & Customs’ use of external consultants after its increased reliance on them for its IT systems is revealed by The Daily Telegraph today.

In April, HMRC spent £844,188 on consultants – the highest monthly amount since 2011 and more than its entire annual spending on consultants in 2015, official figures published this week show. The latest amount is nearly 9,000 per cent greater than the £9,618 HMRC spent in the equivalent period in 2015.

Having significantly cut staff and resources over the past five years, HMRC is now employing big-name firms including Ernst & Young, Accenture and IBM. More than four million calls to HMRC are going unanswered, The Telegraph revealed this week.

In the first four months of this year, HMRC has spent £2.1 million on consultants – nearly matching the entire 2017 yearly spend of £2.2million, and nearly 10 times what it spent in the same period in 2015.

If the spending continues at the same pace, HMRC will shell out more than £6 million in taxpayers’ money on consultants this year, nearly three times as much as in 2017 and more than 10 times the 2013 total.

Frank Field, chairman of the work and pensions committee, said: “The increase is staggering. 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.” He added: “Carillion did nothing but rely on consultants. It is a horrible example of trying to dig yourself out of a hole by spending money.”

A large number of the contracts are for IT consultants, part of HMRC’S push to digitise its systems and drive towards making taxpayers complete digital tax returns.

It is understood some of the contracts are also related to helping HMRC with the effects of exiting the European Union. James Daley, founder of Fairer Finance, the consumer champion, said: “It is generally much cheaper to bring projects in house. Paying consultants is both more expensive and suggests there is a game of catch up being played as a result of a lack of investment over a longer period of time.

“It is not acceptable that HMRC’S systems or customer service is poor, given there can be large penalties if things go wrong, or for late payment.”

A spokesman for HMRC said: “Our spend for the 2017-18 tax year was over 90 per cent lower than it was in 200910 and less than a fraction of one per cent of our total spend with suppliers.”

Earlier this week it was revealed that more than one in 10 callers to HMRC now fails to get through to anyone, compared with just over one in 20 a year ago, prompting criticism from MPS that the service is letting down millions of self-employed people.