Edward Leigh, chair of the Public Accounts Committee, said that the former Inland Revenue used to deal very effectively with a narrower client group, but that the larger HMRC was failing "vulnerable" people with tax credit problems.
During a select committee session in Parliament on 22 February 2010 to examine the National Audit Office's (NAO) report on HMRC's telephone services, Leigh told departmental officials: "During the tax credit renewals peak in 2008 you only managed to answer a third of calls. So these are vulnerable people with desperate problems and you are only answering a third of their calls.
"Now frankly this may be because your workforce is only spending around 38% of its time dealing with customers… so you are not running an efficient organisation," he added.
Lesley Strathie, permanent secretary and chief executive of HMRC, responded that Leigh was being "slightly unfair" because he was referring to the period April 2008 to March 2009. She added the NAO's report has recognised improvements in its calls handling,.
"We are now at the end of January achieving an average of 77% of calls answered, against 55% last year," she said. However, she admitted that "we still have a way to go" to achieve a target of 89%.
Responding to a question from Conservative MP Angela Browning about how the department is preventing avoidable contacts, HMRC's customer contact director Chris Hopson said it had put in place a system whereby staff have been asked to alert the management every time they believe a call is unnecessary.
"I will give you a very specific example," he said. "We send out a letter every year to those people who are completing self-assessment for the first time. We sent out about 660,000 of these letters and it was very clear from the feedback that there was one element of the letter that was confusing people. So we have now changed that letter and saved ourselves 88,000 phone calls as a result."
Leigh asked how the department met the needs of many people, including many of the elderly, who prefer face to face contact to "talking to a machine".
Strathie responded there was a "very low" requirement for face to face contact and that the proportion of customers who say the telephone is their preferred channel is more than 80%.
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