Foreword
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I am laying before Parliament under section 10(4) of the Parliamentary Commissioner Act 1967 this special report on theadministration of Child and Working Tax Credits, which were introduced by the then Inland Revenue (now HM Revenue andCustoms) in April 2003. The new tax credits system is aimed at helping to tackle child poverty and encouraging more people intowork. It is a major project which affects around six million families, and uses a processing system which is wholly IT based. This reportdoes not suggest that the new tax credits system is in general disarray; on the contrary it recognises that, given the scale of theundertaking, its introduction has been broadly successful. However, the new system created fresh challenges for theRevenue. Amongst those six million families, it brought them a new group of customers, the key groups intended to benefit fromthe tax credit reforms: poor families with children and low income earners. These are people who rely on the payments made by theRevenue as an essential part of their family income.
By drawing on the experiences in the complaints referred to me since the introduction of the new system, this report charts theexperience for that particular group of tax credit customers. It seeks to understand what has gone wrong in those cases, theimpact on customers, the effectiveness of the Revenue’s response and the lessons to be learned. However it also raises wider andmore fundamental issues, which are not for me, but for Government and Parliament to address, such as whether a financialsupport system which includes a degree of inbuilt financial uncertainty can meet the needs of this particular group of families.It also suggests that, if such a system is to meet those needs, then a much improved level of customer service is required in the formof better and clearer communications, easier and quicker customer access to Revenue staff who can address problems and queries,and prompt and efficient complaint handling. Without these a sizeable group of families will continue to suffer not justconsiderable inconvenience, but also significant worry, distress and hardship. It is particularly important that these key issues areaddressed before the Revenue transfer over into the system, later this year, the 800,000 families who currently receive their Child TaxCredit through Jobcentre Plus.
In addition, I believe that this review suggests that there are important lessons to be learned, not just for HM Revenue andCustoms, but for all public bodies when implementing new policies and systems. In particular, it highlights the importance, when designing new systems, of starting from the customer perspective and maintaining customer focus throughout the development of the programme. It also highlights the dangers of introducing a ‘onesize fits all’ system. Such systems, whilst superficially providing a fair and consistent and efficient service for all customers can, by failing to pay sufficient regard to the different circumstances and needs of specific client groups, have entirely unintended harsh and unfair consequences for morevulnerable groups.
I know that HM Revenue and Customs are committed to providing good customer service, to understanding the customer experience and to the importance of using complaints as an important source of feedback and learning. I hope, therefore, that they will welcome this report as valuable feedback to help them improve the service they provide to all their customers.
Ann Abraham
Parliamentary and Health Service Ombudsman
June 2005
