The strategic challenges facing the Inland Revenue
In 1999 I said that 'the Revenue is, as never before, in the vanguard of all the major themes that this Government wants to pursue'. What I said, then, is still true today. Indeed the drivers of change - modernising government, welfare reform, changing work patterns in the UK, advances in new technologies - have moved the Department away from its traditional role as an assessor and collector of taxes to one which now encompasses large parts of the Welfare State. That is why our ambition is to be seen as an organisation which exists to enable people to comply easily with their obligations, or to claim their entitlements, as well as to regulate.
Responding to those challenges
The strategic challenges, and how we meet those challenges, are described more fully elsewhere in this website And I would like to say a little bit about how the Inland Revenue has begun to respond to those challenges.
Our move into areas of social policy as the Department responsible for tax credits (and, from next year, child benefit) has led to a significant change in our customer base. Our customers now range from large multinational corporations, through employees and employers to small businesses and on to tax credit recipients, taxpaying pensioners, student loan recipients as well as other Government Departments. This means that it is more than ever essential to identify our customers by groups with distinct needs and wants, and see how best to meet them. We have undertaken analysis and research, so that we can understand those needs. And this substantial programme of research is continuing, but we have already concluded that we must indeed pursue a customer segmentation strategy; only by doing this can we hope to tailor our services to the needs of the individual customer.
But even as our customer base has expanded, so have the channels through which we deliver our services. Technological developments have created opportunities we could never have foreseen when we first outsourced our technology services in 1994. We have opened up contact centres and are at the forefront of the Government's drive to deliver online services. These technological developments will also make it possible for our customers to access our services not just direct from the Inland Revenue, but through intermediaries. We can therefore see ourselves operating a future framework which looks something like this.
This framework will allow the Inland Revenue to:
It can be summarised in three words:
The Business Transformation Agenda
The Department's Business Direction sets out its aspirations for how our business will be delivered in the future, but in a rapidly changing environment its precise shape becomes increasingly difficult to predict. Organisations in the 21st Century can no longer accept the status quo; they must always be seeking to learn and look for better ways to deliver their business. But if the Department is to achieve its ambitions, incremental change can no longer be the answer. We need a step change in the pace at which we transform ourselves. My Board, and I are personally committed to much more rapid progress towards our Business Direction, which is why we have asked the Department to set aside £100m, out of existing budgets, in 2002/03 to fund business transformation projects. So how will we know we are transforming the Inland Revenue? I see four key indicators:
This will only be possible if we invest even more in technology. We need a partner from 2004 who is able to exploit the opportunities that transformation brings, who can put in place the technology architecture which enables us to move to a position where we receive clean data, manage and exploit it in a way that adds genuine value and to get the best from the undoubted benefits of 'e' services for our customers and ourselves. The pace of this change will depend on a variety of factors, some within our control, some not. So our partner needs to understand where, in broad terms, our Business Direction is taking us and be able to adapt and take advantage of the changing circumstances which will inevitably occur during the lifetime of the ASPIRE contract.
However, one thing is certain. The Inland Revenue needs the very best if we are to achieve our ambitions. A tough commercial competition is the way to ensure this. My Board and I will do everything possible to promote such a competition and the exciting opportunities which it will bring.
Nick Montagu
Chairman of the Board of Inland Revenue
27 February 2002
