Public Service Agreements (PSAs), Performance and Efficiency Targets

HMRC PSAs and Performance (including former IR and HMCE)

Introduction and Efficiency Targets

It was announced in the 2004 Budget that HM Customs & Excise and the Inland Revenue would be integrated to form a single department, HM Revenue & Customs (HMRC). In the 2002 Spending Review (SR02), Inland Revenue and HM Customs & Excise were set separate PSAs. In the 2004 Spending Review (SR04), they were set joint targets which became the PSA for HM Revenue & Customs from April 2005.

The 2004 Spending Review also set us challenging targets to achieve efficiency savings, and we are committed to relocating posts out of London and the South East.

The 3 main Efficiency targets (excluding Valuation Office Agency) are as follows:

1. By April 2008 to achieve a gross reduction of 16,000 FTE* posts (set against a revised 1 April 2004 baseline of 97,755 FTE’s) and a net reduction of 12,500 FTE posts, allowing for the redeployment of 3,500 posts to front line areas eg. VAT strategy, counter terrorism and spend to save. (4 years 2004-05 to 2007-08).
2. By April 2008 to position HMRC to deliver at least £507m in annual efficiencies (set against a 2004-05 baseline of £4,117m**) of which at least half must be cash-releasing to allow resources to be recycled in priority programmes (3 years 2005-06 to 2007-08).
3. By April 2008 to relocate 1,950 posts out of London and the South-East; with a further 2,300 posts to be relocated by April 2010 – bringing the total to 4,250 (Lyons).

*FTE= Full Time Equivalent
**This figure excludes RCPO and SOCA and the latter transfer has not been fully finalised and so it does not include estates and other services costs which will probably be less than £13m.