19 March 2004
The UK's revenue departments are to be merged, with the loss of 10,500 jobs in the next four years in what is likely to be the first round of efficiency cuts.
The merger of Customs & Excise and the Inland Revenue has been widely touted since the announcement of a review a year ago.
The plans, announced with the Budget, will create a single tax system, to focus more on customer service. The new department, as yet unnamed, will eventually merge some information systems, allowing it 'smarter audits' to track down tax cheats. The tax gap – the difference between what is due in law and what is actually paid – is estimated at between 8% and 13% of revenue.
This new 'one-stop-shop' will be housed in the Treasury with both departments moving there by the autumn. The Treasury plans to shed 14,000 jobs by 2008 through greater efficiency, reducing duplication and e-government. Around 3,500 of these posts will be redeployed but, with a pledge of more than a 5% budget reduction within four years and the finer details still to be decided, there are likely to be more reductions.
'There are already numbers [for staff cuts] but as new management come in and doubtless want to think about business process re-engineering, there could be more,' conceded treasury permanent secretary Gus O'Donnell.
The Public and Commercial Services union reacted with 'disbelief' at the job losses describing them as 'unacceptable.'
'If the government is serious about tackling tax evasion and combating smuggling, arbitrary cuts in vital services are not the answer, said Mark Serwotka, general secretary.
Around 150 policy staff will also move directly to the Treasury. Ministers will set the department's annual remit in a new accountability structure but it will be headed by an executive chair.
PFmar2004
