Jon Thompson, chief executive of HMRC, is leading a major transformational change programme at the tax authority. In his latest HMRC blog, he outlines the priorities and challenges of digital transformation, from the ambitious Making Tax Digital overhaul to personal tax accounts and the risk of Brexit overload
‘You might be asking yourself what the CEO of Her Majesty’s Revenue & Customs (HMRC) knows about leading through change. But, if you didn’t know, we are midway through delivering one of the largest organisational change programmes that has been attempted in Europe.
Back in the Spending Review 2015, HMRC managed to secure an investment of £1.8bn over five years. The fundamentals of that investment were that we would digitise the relationship between customers and HMRC, and modernise the organisation in response.
In many respects this was a bold and visionary move.
It identified how HMRC needed to change to respond in an increasingly digital, data-driven world. The payback was clear.
If we could digitise the relationship, then customers would make fewer errors and we would be able to target our interventions on a data- and risk-driven basis. Both meant that we would collect more tax: enough to pay back the investment in only two years after the programme was in full swing.
But the programme aimed to go much deeper. To deliver its aims, we also needed to modernise HMRC in just about every respect, from the office environment, to providing quality technology, modernising learning, improving leadership and leaning heavily into new cross-government capacity-building areas like commercial.
While we were at it, we wanted to become a more diverse and inclusive organisation, given the possibly unique opportunity presented by recruiting nearly 13,000 new colleagues in the last two years alone.
The upshot of all of this was one huge portfolio with, at its height in late 2017, 15 major programmes and 267 projects in progress.
I joined HMRC in April 2016 with the portfolio up and running. Dedicated quality leadership of these projects was all in place and we saw some great early success.
The launch of the personal tax account and business tax account was only two years ago. Two years on we have just passed 18m registered users. We are one of the UK's most digital businesses: of our 2.3bn transactions a year, 2bn are online.
And yet, with all this and so much more, we remain in the foothills of what might be possible.
We have deployed robotics at scale, biometric voice recognition for security, and we have some fantastic experiments with Blockchain (a decentralised database system that securely stores and links transaction data).
Has this all been smooth sailing? Well, frankly, not exactly. We have certainly learned a lot about how we should have been more open, early on, with colleagues and involved them more in major changes. Many of these changes directly impact on colleagues, on where and how they work, which is very personal.
To try and be more open, in early 2017 we involved as many colleagues as possible, almost everyone, in what values we should adopt for the future of HMRC and our collective Vision Statement.
Lately, we’ve involved tens of thousands of colleagues in how we might change the performance management system from April 2018.
For the future, our aim remains trying to co-create change and create a culture where everyone can be innovative. It seems to me that this resonates clearly with what colleagues wanted – an innovative culture where the views of all are respected and listened to.
All that technology change has brought some clear and very positive changes. But it hasn’t all quite landed as we wanted – yet.
For example, the new fully digital tax free childcare service has had some teething problems in its opening months. Trying to explain to stakeholders how Agile (IT development) methodology works isn’t easy. However, as you would expect, the service has improved significantly in the 10 months since its launch, working from customer feedback and continuously improving.
On my many travels around our UK offices I try to do as many in-person open Q&As as possible, and supplement that with open Q&As on our intranet. A common theme lately has been whether it is still possible to deliver this ambitious agenda while finding the bandwidth for Brexit.
I have said publicly that I do not think it is credible (see HMRC reviewing priorities in Making Tax Digital programme).
So, we have been working really hard on prioritising what projects make the most difference, prioritising them and then creating the room to accommodate Brexit.
But we are doing so in a way that involves many more colleagues now than we involved way back in 2015. And when it’s agreed I plan to make the result transparent, so colleagues can see what we are continuing with, what gets elongated and what we will not be starting.
I am incredibly grateful to the hard work of colleagues across HMRC, not just in delivering change, but on record results for several years in a row. Together we are building a better, more digital tax system and organisation, fit for future challenges.
This blog was first published on the Civil Service blog. Posted by: Jon Thompson, first permanent secretary and chief executive, HMRC on 1 March 2018 - Categories: Civil Service Leaders. Find out more here