I know I keep banging on about this but I’m still not sure the penny has dropped for many people. More efficient public services won’t necessarily be better from the end user’s point of view. Given the scale of savings required over the next few years, they will almost certainly be worse. Like my hypothetical school in yesterday’s post, they might simply increase their efficiency by delivering less.
The publication of a commons report on HMRC caused a lot of huffing and puffing last week. According to the Treasury select committee, Revenue and Customs is barely able to function and customer service has all but collapsed. But amidst all the condemnation and the eating of humble pie by HMRC’s chairman, some of the numbers got lost.
The National Audit Office reports that HMRC has cut its running costs over the 3 years to 2010-11 by an average of 6 percent per year. Over the same period, its revenue collection has remained constant at about 91 percent of revenue due. That means that HMRC is now more efficient than it was 3 years ago. It is doing the same for 18 percent less. Most CFOs would be more than happy if their billing and revenue collection departments were to deliver performance like this. OK, it would be better if they upped their collection rates but managing to do the same while costing a lot less is a good start.
Some of these cost savings seem to have been achieved at the expense of customer service. As I have said before, one of the easiest ways to simplify processes in a service industry is to design out the customer. The more you can force them to follow set procedures, the less time you have to spend on the phone. This strategy is short-sighted when you are trying to sell things to people but when you are trying to collect money from them it makes more sense.
Much of the tax gap is due to small errors and fiddles worth less than £1000. Rather than investigate the culprits, or call them to ask questions, it’s much cheaper to send them letters, threatening to break their doors down and seize goods to pay off their debts. This scares the shit out of most people. If the letters include contact phone numbers they can’t get through on, it forces them to write and explain themselves. It’s not nice but it does the job and it’s much cheaper than having people taking calls listening to excuses.
The complaints from MPs, which were widely reported at the weekend, were mostly about the way HMRC treated people and its determination to force more of us to do things online. But that, alas, is how you make its services cheaper to administer. HMRC has to make similar savings, around 6 percent per year, over the next four years, so expect more of the same.
This is what cheaper and more efficient public services look like. With cuts of this scale and speed, it is extremely unlikely that many public services will be able to do more for less. The best we can hope for is quite a bit less for a hell of a lot less. In the process, some parts of the state will simply stop doing stuff. Most of the nice-to-haves and quite a lot of the near-essentials will go.
People won’t like it. Most no longer believe the more-for-less spin but a lot still think they will get the same for less. They will be in for a shock. Performance and productivity are not the same thing. The public services of the futue will, hopefully, be more cost-effective but, in becoming so, they will won’t give us as much as we have been used to. In some cases, cheap may well mean nasty too.