By Maximilian Clarke

HM Revenue & Customs must focus on boosting staff skills if it is to meet its targets of shaving 25% from its budget and increasing tax revenue by £7bn, a National Audit Office report concludes.

The National Audit Office has today reported to Parliament that HMRC does not know how much it is spending in total on skills development, or if its money is being spent in the right places. The National Audit Office estimates that HMRC spent £96 million in 2010-11 developing the skills of its staff but judges that the Department is not systematically directing that spending on top level business priorities.

The Department has recognized that it has significant challenges and is doing much to ensure it has the skills it needs. It is developing major professional programmes, using new technologies and fast-tracking training for key roles. Staff skills will have been a factor in the improvement of HMRC’s business results including the extra £1billion tax generated since 2010 by enforcement and compliance activity. But currently there is not a direct evidential link between results and training and development activities. The majority of staff in HMRC (79 per cent in the 2011 staff survey) say that they have the skills they need to do their job effectively. However, only 54 per cent said that they were able to access the right learning and development opportunities when they needed to and only 38 per cent said that training had improved their performance.

Evidence from a customer survey and external stakeholders also suggests that the Department does not have all the skills it needs, but HMRC does not have a good overview of its current skills gaps. It needs better data and information on gaps which would help it take a more strategic approach and gain an early warning of future skills gaps, such as the risk of skills depleting as experienced staff retire. This is of particular concern in HMRC as one in five staff in key business areas are over 55.

HMRC is spending money on skills development in some key business areas but does not yet have a skills strategy to direct spending systematically towards areas that produce the most important business results and which links to a model of how the organization will operate in the future. There is an absence of engagement at senior level in staff skills and there is no specific body that examines the total spending on skills and decides whether it is being made in the right parts of the organization.

HMRC also lacks governance arrangements or structures to hold the organization to account for money spent on training. Many of the points in this report were raised previously by HMRC’s own reviews but the Department has not made the changes needed. For example, HMRC’s total number of training courses has not reduced from 2,000 courses in 2009 when an internal review raised concerns about poor focus in training provision.

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