Integration in the public sector: HM Revenue and Customs
A HMRC case study

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Page 5: The impact and benefits of integration on stakeholders


A stakeholder is an individual or organisation that has an interest in how an organisation is run. Some of the main HMRC stakeholders and their interests are:

  • employees looking for more rewarding work and seeing their organisation well run
  • government looking for lower costs that are likely to result from integration.

So every stakeholder stands to benefit from the integration. This applies to people of all ages and to businesses of all different sizes. The examples in the last section show some ways the public can gain.


The O'Donnel Reviewidentified lower costs that would flow from integration.

Benefits of integration

i. Communication savings

A one-stop shop with a strong Internet presence and all the latest technologymakes it much easier for people and businesses to discuss the full range of tax and benefit issues affecting them.

HMRC two way communication channels

ii. Staff savings and motivation

Staff are now trained to deal with a wider range of related issues leading to more variety of work per person and a better understanding of how to meet customers' information needs. Employees in the new HMRC have far more opportunity to enrich their work lives by learning and developing new skills. This lowers costs and leads to faster service.Employees of HMRC carry out very specialist work. Each person will need to concentrate on what they know about e.g. a person dealing with Value AddedTax(VAT) needs very different knowledge from someone dealing with Tax Credits. Employees will therefore continue to need specialist training. However, in an integrated service they also need a general knowledge of how the whole organisation works and which other people in the organisation to refer customer queries and problems to. This training will also increase motivation.

iii. Procurement or commercial savings

Procurement means obtaining resources e.g. buying stationery and materials. Cutting costs happens because large economies of scalesavings can be achieved through bulk buying. It is also cheaper as purchases are made for only one larger department - HMRC.

iv. Premises savings

Instead of operating from two sets of premises, HMRC will be able to decide which premises offer most benefit to their business and their stakeholders and operate from them. This process is known as rationalisation.

v. Other economies of scale

There are various economies of scale (i.e. cutting costs by becoming larger) that result from this integration. These lead to a number of savings, including:

  • information technology economies: paying for only a single one stop website
  • human resource management economies: operating only one system for managing and developing people
  • economies of simplification: operating with only a single name and logo.

These economies of scale will obviously benefit people and businesses. There will be a simple and easy to understand system of paying tax, and a much cheaper, cost effective and improved service.

HMRC | Integration in the public sector: HM Revenue and Customs