Can HMRC bear another 7,000 job losses?

The rumours emanating from Whitehall that, as part of the review of Government spending, 10% of the current workforce, 70,000 strong, will be of concern to those who believe that service levels are already poor. From the perspective of the 'poor bloody infantry' on the frontline, it will certainly come as a blow.

And yet, there is potentially scope to achieve such job losses. The new PAYE computer system spells the end of manual reconciliations, and therefore the people who carried them out. Mandatory e-filing of company tax returns for corporation tax will severely reduce the need for filing and data entry clerks, whilst mandatory electronic payment will reduce the ranks of those handling cheques.

Retirements will thin numbers too. My office has a significant number of staff who will be able to retire soon, and many of them will be only too keen to go, given morale levels. Whilst Andrew Tyrie and his colleagues condemn HMRC's senior management for presiding over a continuing drop in morale, staff survey after staff survey indicates that the problems do not change, they merely intensify. It hardly provides an incentive for experienced staff to do any more than get to sixty, or complete forty years, and go, lump sum and pension in hand.

Funnily enough, I'm not attacking HMRC. It is inevitable that technology and the Government's near bankruptcy will conspire to reduce the number of warm bodies required. However, the ability of senior management to convey a sense of strategic direction and integrity is doing them, and HMRC as a whole, no favours. At a time when goodwill is more necessary than ever, the way that the PAYE debacle was handled has put the Department firmly on the back foot. The diet of media bouncers which has followed was an inevitable result.

If politicians conclude that, like the Home Office before it, HMRC is not fit for purpose, the Government will need to act quickly and decisively. At a time when politicians are searching down the back of the sofa for pennies, a crisis of confidence and credibility at HMRC could be very costly.