HM Revenue & Customs: as I was saying earlier...

The Guardian today raises further concerns about the performance, attitude and approach of HM Revenue & Customs. Its report doesn't make pretty reading for the Board, under its new Chairman, Mike Clasper (left).

There can be no question that he takes over an organisation that is in a less than happy state. Major reorganisations stemming from a series of reviews have led to office closures from Buckie to Bury St Edmunds, the loss of thousands of jobs, and a sense amongst many staff of alienation. And now, at a time when staff are being asked to make sacrifices in pursuit of the imposition of a 5% cut in running costs year by year, a pay offer which offers staff pay rises of 2% in 2008 and 1% in 2009 and 2010 has brought a not wholly unexpected response from the two key unions involved.

I have no great argument with management, especially as they can only play with the cards they're dealt by HM Treasury, and their quoted statistic that resignations represent just 3.2% of our workforce does imply that retention is not a problem. However, might I suggest that if you want an organisation that is smarter and more effective, it might help to recruit better staff by offering them a competitive salary scale.

No, my sense of incredulity is directed at the Government. Their use of the bluntest of blunt instruments, a fixed year on year cut, regardless of the wider economic picture and at a time when inflation is high, means that a planned real terms cut of 4.9% in running costs has become somewhat more draconian in its effects. The spending plans, based on an predicted inflation rate of 2.8% for 2008/09, and 2.5% for 2009/10 and 2010/11, are now clearly shown to be optimistic, and I have my doubts as to whether Ministers actually understand the consequences of their actions.

There is no doubt that scope for efficiencies has always existed. In an age when computer usage in the norm, and when communications doesn't have to be face to face, the existence of offices in areas where accommodation and labour costs are high is sometimes hard to justify. The option of e-filing of documents means that clerical staff who once filed and sorted are obsolete. But change comes with costs of its own. Transitions need to be managed and resourced, treated as investments, if you like. Those responsible for the work need to be motivated to continue working productively whilst their jobs come to an end.

I believe that this results from the Labour misunderstanding of the nature of society. Society is about more than just groups brought together for a common interest, it is about individuals, the very building blocks of our communities. Labour sees our public services as machines, designed to deliver outcomes, but seldom worries about what motivates the individual 'cogs' to perform their duties well and efficiently. Money isn't the prime mover, especially as civil service salaries fall behind the private sector. A sense of public service, the satisfaction of a job well done, pride in our Department, these are all key elements of the 'glue' that holds HM Revenue & Customs together.

So I fear that there will be a fair bit of unhappiness to come, and some unenviable moments for Mr Clasper to look forward to. I plan to stay put, after all, I am somewhat institutionalised. It would be nice to think that there might be an organisation worth working for at the end of it.