HMRC urged to step up automated data collection

HM Revenue and Customs (HMRC) should look towards developing more automated and cost-effective ways of collecting data about its business, according to a National Audit Office (NAO) review into the department's "indicators" and operational data systems. The review, carried out over five months to February 2012, found that some manual data collection is time consuming and resource intensive. There is a risk that with continuing headcount reductions, it may be difficult to maintain its current systems. It gives the example of the length of time needed to deal with data about postal enquiries, which is collected manually by examining a sample of post received. "An automated logging system could be a more cost-effective way of measuring the length of time taken to deal with post," the document says. "[HMRC] should also consider whether it is necessary to collect all the data it currently collects… or whether it would be more cost-effective to focus on a reduced number of key measures, such as those which are most business-critical or liable to fluctuations in performance." According to the NAO, there are some areas where performance information could be improved to give better insight into how the department is performing in "priority areas" and making progress with the challenges it faces. In particular, HMRC aims to improve efficiency, but its published indicators measuring the unit costs of tax collection and benefits administration are not affected by efficiency alone, the report says. The unit cost indicators are affected by other factors, such as tax rates and economic conditions, which may make comparisons over time misleading.