Red tape and waste in Britain’s public services must be slashed to tackle soaring costs and keep taxes down, Chancellor Jeremy Hunt has warned.
Mr Hunt is concerned that costs are going “up and up” and says he wants to “slash admin” so people who are “paid by the taxpayer can focus on solving problems, treating patients, teaching kids and catching criminals”.
He is clear that low taxes in the long-term depend on reform of the public services.
The Chancellor warns that Britain needs a “resilient” economy at a time of “global instability” and says that “falling inflation and outperforming forecasts” is not enough.
Warning of “wasteful” spending in the public services, he makes the case for change – starting with a simplification of the tax system.
He said: “HMRC sends and receives more than 150 million letters and forms each year, many of which people don’t want or need.”
The plan to move more of HMRC’s services online is expected to save “millions” of pounds and free up “thousands” of hours. Mr Hunt says new technology has ramped up efficiency in the health service. “New tech has already halved the time it takes to treat stroke victims, tripling their chances of living independently afterwards,” he said.
“This is a huge benefit to patients and helps doctors focus on those who need help the most. I want to see this happen across the public sector: less admin for staff, a better service and time to help those who need it.”
Mr Hunt is encouraged that the economy has defied the most pessimistic predictions but insists that more must be done. He said: “With global instability and uncertainty, we need to make sure that Britain’s economy is resilient. That means getting inflation down and growth up.
“Most forecasters predicted recession this year but that hasn’t happened and, moreover, growth has been revised up. Britain had been branded a laggard compared to other G7 countries but it turns out we had the fastest recovery from the pandemic of any major European economy.
“We are on track to halve inflation as well but falling inflation and outperforming forecasts is not enough.The cost of our public services is going up and up. Some of that is with good reason – they are vital services that need government investment. But some of it is wasteful. That’s why we need reform so the bill for taxpayers is justifiable and we can keep taxes down in the long run.”
Chief Secretary to the Treasury John Glen is leading a “public sector productivity review” which will report this autumn. The Chancellor hopes his cap on civil servant headcount will save up to £1billion.
HMRC sent around 136 million items in the post in 2022-23 and received 22 million. Mr Hunt argues that “just as so many of us use online banking, the convenience of online tax services needs to catch up”.
He is adamant that this is not about cutting the civil service. “Public sector reform doesn’t mean making cuts,” he said. “It means doing more with what we have, and delivering a better deal for taxpayers and service users.”
HMRC will aim to reduce “paper-based” and “adviser-led phone communications” by 30 per cent over the next two years. His push for reform comes as it is reported that HMRC customer service staff will work fewer hours in quieter times and more in busier periods, such as the tax return season.
