Joint Departmental Board 20 January 2005 Summary Minutes

Attending: David Varney (Chairman), Ann Chant, Bill Griffiths, Mike Eland, Helen Ghosh, Tony Hall, Mike Hanson, Dave Hartnett, David Hogg, Andrew Hudson, Stephen Jones, Steve Lamey, Stephen Lander, Nick MacPherson, Mike Norgrove, Kate Owen, Philip Ridd, David Spencer, Pat Stafford, Barry Quirk, Emma Broadbent (secretary).

Apologies: Paul Gray, Alison French, David Garlick, Steve Heminsley.

Key points of discussion

The Chairman welcomed Nick MacPherson to the Board.

Minutes of the Last Meeting and Matters Arising

The minutes were agreed.

Matters arising. The Bill remains on timetable and is now through the committee stage, the main change has been the decision to carry forward the Inland Revenue Oath to the new department. The Board Forward Look will be reviewed at a separate meeting with the Non Executive Directors.

Business Report / Finance Update

Stephen Jones provided an update. A way forward on CIS has been found, allowing us to proceed with the project, work is underway to reduce costs. There are continuing severe pressures in relation to tax credits and this produces difficult choices, the pressure of time and other events has not allowed full discussion of these choices with the Board but in future such discussions will come to the Board. Our claim on the reserve for part of the funding for the Child Trust Fund has been approved, but Stephen explained the conditions on this approval which will require very careful financial management through the last quarter of the year. Customs remains on track to underspend against its budget. The costs of the GOGGS building will come onto our balance sheet and we have submitted a reserve claim in this respect. Stephen explained the key factors that could considerably affect our forecasts for the last quarter - IT - where it remains difficult to get an accurate picture of when we will spend; legal provisions which can be affected by court cases; any severance or early retirement; and large numbers of Revenue staff qualifying for team bonuses. Stephen confirmed we remain two separate departments and there is no facility to transfer funds between the two, if a single cost benefits both departments then it is attributed on a 70:30 basis.

On planning the Chairman said that we have held back as long as we can the detailed planning process for 05/06 but that we are now at the point where we need to engage with staff and to set targets, this process will inevitably produce difficult choices and decisions. The allocation for 05/06 has been divided between the main budget holders and they have been asked for a draft plan by the end of January. The finance and change teams will review the plans and quality mark them, they will then be considered by the Executive Committee. The choices we have will be influenced by work we have been doing over the past months, such as the trials in IRECs and on self-assessment process. The work Paul Gray is leading on organisational design will underpin this process. A strategy unit is being set up to support the Board, by working to articulate our overall strategy - the Chairman felt strategic planning would be easier next year once our work on efficiencies has progressed - currently we need to build momentum through delivering efficiencies. It was recognised that the design we have on day 1 will need to evolve over the year as we drive out clarity and identify unintended consequences. The Chairman is issuing a series of regular messages to set out what we are doing to staff.

Transition Update

Negotiations with the DTUS have begun on a number of HR fronts. Work is ongoing on a short term and a longer-term package on surpluses. The new Director of Communications is about to be appointed. Nick Dyson, head of KAI, has taken up post.

Change Management Centre Update

Change have been working closely with finance on the business planning process. Work is ongoing on the launch, which will be low-key and concentrate on what staff and stakeholders need to know on day one. Ministers are being kept informed. Transition projects are continuing and are being 'mainstreamed'. The big expenditure programmes have been analysed for the Executive Committee. Work is ongoing with the CIO to review the number of feasibility studies that are in the pipeline. A new approvals process is being developed for projects. Work is also ongoing on communications and on getting constructive engagement in the change process. The Board noted that the challenge is not just to drive out efficiencies but to radically change how we do things, it also recognised there is a huge challenge for managers both to manage the changes in their own areas and to contribute to the corporate process.

Design

There will be a two day workshop next week to take forward. Papers will be circulated to the Non-Executive Directors.

Operations Report

Mike Hanson provided an update. Five SDA/PSA targets are red - we expect all except take-up for e-services to be achieved. The e-services target will not be met without mandation. The key challenge for operations now is to press ahead with plans to meet its challenging targets for 05/06. Mike Norgrove reported on the drugs targets, cocaine is red and we are unlikely to meet the target, Heroin is also red, the measures we have put in place are only likely to take affect in the medium term.

Top Level Committees

The Executive Committee has started to move to position this forum as the primary decision making body for HMRC and as a result is considering a wider range of issues. The Board agreed that ExCom should therefore be constituted as a formal sub-committee of the Board and Terms of Reference for ExCom will be prepared accordingly. The Board also noted that with effect from this month the Customs and Revenue Management Committees are holding joint meetings, the Board agreed the Terms of Reference for the new joint Management Committee. The Board will see the minutes of both committees.

Any Other Business

• The PAC will hold hearings on the Inland Revenue and Customs and Excise standard reports over the next few weeks. The Chairman explained the current situation on the qualification of the Customs accounts.
• The SOCA Bill is proceeding to a similar timescale as the HMRC Bill, Board appointments for SOCA have been advertised and a blueprint of how the new organisation will work has been set out.
• Andrew Hudson explained articles in the press about the EU announcement of an investigation into the regulation of telecoms.
• Andrew Hudson advised the Board that the organisational structure of the VOA has been reviewed and a paper on this will come to the Board.
• Dave Hartnett gave an update on discussions with EDS.
• A draft Mission Statement is out for consultation with staff and key stakeholders, the Non Executive Directors will be involved in this process.

Board Secretary