Public Services > Central Government

HMRC boss steps up pressure on Treasury over CHIEF funding

David Bicknell Published 21 November 2017

Thompson urges Hammond to pay up, telling PAC hearing, “Just to be really clear, it is going to happen and I am going to spend the money, whether I get it or not”


HM Revenue & Customs (HMRC) chief executive and permanent secretary Jon Thompson has stepped up the pressure on Chancellor Philip Hammond over the funding needed to upgrade the department’s CHIEF customs system as a contingency for any issues with the Customs Declaration Service system it is developing in time for Brexit.

HMRC was criticised by the Public Accounts Committee (PAC) in a report published last week for not pushing the Treasury hard enough to get the £7.3m funding needed to upgrade CHIEF to deal with the million declarations that could be made each year. 

The PAC said in the report, “In the context of the CDS programme, this would seem a relatively small sum to pay to guard against the wider financial and reputational costs of failure. It needs to progress this work urgently and obtain the additional funding required, to ensure that CDS can deal with the potential increase in volumes, and that an adequate fall-back option is in place in case this is delayed.”

It made a recommendation that the Treasury should ensure that HMRC has sufficient funding by December 2017 to increase the capacity of CDS to handle the 255m customs declarations each year, and to develop functioning contingency arrangements, such as beefing up its ageing CHIEF system's capability.

There is a possibility that Hammond could announce the £7.3m funding shortly, possibly even in his Budget statement tomorrow.

Appearing before the PAC again yesterday, in a hearing about Border organisations and systems impacted by Brexit, Thompson was asked by PAC chair Meg Hillier whether there was any more news on CHIEF funding.

Thompson said, “We are negotiating with the Treasury and I am grateful for your additional leverage,” a comment which amused Hillier. He went on, “Just to be really clear, it is going to happen and I am going to spend the money, whether I get it or not.”

Hillier said, “That’s a challenge to the Chancellor, Mr Thompson, and very bold of you.”

Thompson was joined in front of the PAC by Patsy Wilkinson, Second Permanent Secretary, Home Office, Karen Wheeler, Director General, HM Revenue and Customs, Claire Moriarty, Permanent Secretary, DEFRA, and Paul Lincoln, Director General, UK Border Force to discuss the preparedness of systems at the border for Brexit.

Last week, in a statement backing up the PAC report, Hillier said, "Failure to have a viable customs system in place before the UK's planned exit from the EU would wreak havoc for UK business, trade and our international reputation. Confidence would collapse amid the potentially catastrophic effects.

“HMRC is under considerable pressure to deliver the new Customs Declaration Service in time, but it does not yet have funding to increase the capacity of CDS to deal with the consequences of Brexit—nor to develop contingency options.

“HMRC tells us it is merely 'in conversation' over CHIEF upgrade costs when, on behalf of business and the British public, it should be banging on the doors of the Treasury.

“HMRC must press the case to secure this funding now and ensure that, if other plans fail, customs will be fit for purpose."


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