Departmental Board 11 December 2006 Summary Minutes

Attending: Paul Gray, Mike Eland, Bill Griffiths, Bernadette Kenny, Dave Hartnett, David Hogg, John Spence, Kate Owen (attended for item 4), Mark Haysom, Mike Hanson, Penny Melville-Brown, Stephen Jones, Steve Heminsley, Nick Macpherson (attended until mid way through item 3), David Varney (attended until mid way through item 3), Emma Nutt (Secretary)

Invitees: Chris Hopson, Kevan Jones, Ann Chinner

Apologies: Steve Lamey, Emma Nutt

Key points of discussion

1. Update on HMRC issues

Paul Gray updated the Board on the Workforce Change announcement made on 16 November. This had announced the process the department intended to go through in order to slim down the current number of locations. PG confirmed that there had been little press coverage of the announcement, with the most interest being generated in devolved areas. It was felt the decision to spread ExCom members across the country had been the right one. This was the start of a series of engagements and there had been a degree of acknowledgement across the business that this process was more open than either of the former departments had necessarily been. This had been recognised in a poll of 1,000 employees immediately after the announcement. 75% of staff confirmed they first heard about the announcement directly from their manager. PG confirmed that the Paymaster General would be meeting with MPs to discuss the proposed changes. It was most likely that these meetings would take place on a rolling programme as the consultation process began in different regions. The Board briefly discussed how the process of consultation fitted with the Department for Work and Pensions and how cooperation between the two departments could be improved.

The Board were updated on Industrial Relations issues.

PG updated the Board on the Pre-Budget Report (PBR). This had gone well. The Board discussed the impact of the PBR on the Department.

PG updated the Board on the ExCom away day. This had been a good session and ExCom felt they were building a strong operating team. Through the away day ExCom had gained a deeper understanding of the dynamics of the team and how they worked together.

3. How we can work better together as a Board

The Board were asked to consider what value should the Board be adding to HMRC, what currently works and likewise what currently doesn’t work? In discussion common themes of agreement arose around smaller groups/sub-committees working well, improving the Board agenda and topics of discussion brought to the Board to avoid simply repeating discussions previously held at ExCom, building a team rather than Executives and Non-Executives, and flexibility around input with clear conclusion to discussions. There was less clarity around the need for a forward looking narrative and overall knowledge of where HMRC is heading and the key risks it faces. In discussing the necessary actions to take forward from this the Board agreed it would be useful to have pre-meetings between the Chairman, an Executive member and the Non-Executives in the hour preceding individual Board meetings. Approaches to the Non-Executives by the Department were currently rather ad-hoc and this could be improved through the proposed Office of the Non-Executives function. More Board meetings could be held out of London and include visits to various areas of the Business. A departmental narrative should be developed and this would help structure the dynamics of Board meetings. Issues should be considered in more depth than was currently always the case. The roles of the Board, ExCom and OpCom and the links between them should be reviewed. All actions should be completed by March 2007.

4. People Issues

Kate Owen led a discussion on departmental policy on performance and appraisal and what HMRC was trying to achieve through its appraisal and reward system. The Board discussed the need for appraisals to consist of genuine conversations leading to outcomes designed to develop individuals. In the context of this should reward and appraisal be linked or could individual’s performance be better managed if they were not linked? There was recognition that as a Government Department HMRC had to take into consideration the cross Civil Service view on performance and appraisal and could not act in isolation. The Board acknowledged that there was a large number of interconnected issues surrounding this discussion and the new Chief People Officer (when appointed) should be given the chance to feed into this. The Board agreed that the overall ambition for the department was to drive a stronger performance culture and be more open and honest about performance at a higher level. Following discussion the Board agreed that there was a need for some further work on this issue before a final decision could be taken.

4. Any Other Business

There was no AOB.

Action points

AP1: PG to hold pre-meeting with an ExCom member and the Non-Executives prior to each Board meeting. To begin from January 2007

AP2: PG, Chris Hopson, Mark Haysom and Penny Melville-Brown to look at developing a strategic narrative, with the aim of this being in place by the end of January 2007.

AP3: Steve Lamey to look at the link between the Board, ExCom and OpCom and their roles and to bring discussion paper to ExCom on 16 January 2007.

AP4: PG and the Non-Executive Directors to map out the Board agenda for 2007 and to consider the necessary changes to be made to the mechanisms of the Board arising from today’s discussion on how the Board could work better together.

AP5: PG to identify key ExCom lead to tease out strategic issues surrounding performance and appraisal discussion and for this to be brought back to the Board in due course.