Consultancy asked to develop proposals to encourage use of digital tools, but department pledges that ‘we will always be there to answer the phone for those who need extra help’
HM Revenue and Customs is undertaking a £250,000 short-term project to generate innovative ideas for “reducing avoidable contact” from citizens reaching pension age, PublicTechnology can reveal.
On 22 January the department entered into an agreement with consultancy EY lasting until the end of this month. During that time, the firm will be expected to “recommend ideas and solutions and create a plan for a proof of concept/prototype for a solution that helps reduce levels of contact HMRC receives from pensioners entering the tax system”, according to the text of the contract.
The document explains “growth forecasts for pension customers remain high” and that, while “most taxpayers will have simple affairs… the scale of the increase poses a challenge to HMRC’s capacity”.
The contract adds: “This in an early-stage innovation project and the scope of work includes exploration of the problem area, generation of solutions to address this problem, including what other organisations are doing to address similar problems and working with HMRC in evaluating which of the potential solutions are feasible for the customer group and potentially work on a proof of concept that demonstrates the benefits of the solution to HMRC.”
The number of citizens for whom the State Pensions is their sole income – and therefore taxable under HMRC’s Simple Assessment programme – stood at 180,000 in the 2023-24 year. This figure is due to increase more than threefold by 2028-29, to a total of 540,000. Alongside which the overall number of recipients of a taxable State Pension entitlement will swell from 1.5 million to 4.6 million, according to the contract.
“Pensioners are likely to contact HMRC by telephone and post,” it adds. “Shifting this demand to digital channels will help manage growing demand.”
EY has been retained to fulfil a programme beginning with “problem exploration, evidence-gathering, [and] outside-in research” before reviewing “case studies” from both the public sector and beyond. This will then lead into “idea generation and feasibility assessment” and then “concept design and prototype”.
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The first specific task for the supplier will be to create and agree with HMRC a “longlist of innovation ideas for reducing avoidable contact received by telephone and post to be proposed by the supplier and agreed”.
After this has been whittled down to a shortlist – ideas which from will be retained and “may be used by HMRC to build a future pipeline for projects in this space” – a single proposal will be selected for progression into a “concept design and prototype approach” phase.
“This will also include expected benefits of this idea and how these benefits will be realised and measured,” the contract adds. “This idea and any concept design or prototype approach must enable competitive procurements for subsequent project phases.”
The contract, which is valued at £246,970, will conclude with a process of “knowledge transfer and handover… to HMRC staff to support future project development”.
In recent years HMRC has endured high-profile struggles with the performance of its customer-service telephone lines. Monthly data published by the department recently revealed that, in the closing months of last year, its helplines had met their baseline target for customer service for the first time in more than three years.
In response to enquiries from PublicTechnology, HMRC reiterated such gains, claiming that average call-waiting times have reduced from 28 minutes as of April 2024 to a current tally of 11 minutes. The department also indicated that exchequer secretary to the Treasury James Murray – the minister who oversees the tax agency’s work – has made a priority of boosting digital services and improving customer service more widely.
An HMRC spokesperson added:“The aim of this contract is to explore how we can help pensioners quickly and easily access information they need about their tax and Simple Assessment, without having to wait on the phone. We will always be there to answer the phone for those who need extra help, including pensioners. At the same time, more than 80% of customers are satisfied with our digital services, with more and more people using them to manage their tax affairs.”
