Tax office runs out of paper… no really, they did

I thought this was a joke when I saw it.. but apparently not. HMRC (the UK Tax Office) couldn’t send out hundreds of thousands of reminder letters to people owing tax payments last month because.. they ran out of paper on which to print the letters.

As the Telegraph reported:

It is understood that officials failed to increase the paper order in line with an unexpected rise in the number of statements being issued this year.

We posted this just last week in the context of allocating risk in a paper contract:

But if the price increases, then the provider is exposed (without hedging).  So there’s every chance they will come back and say, “‘we just can’t supply at this price. You don’t really want us to go bust, do you”?

I have no evidence that this is what happened here although..  you never know.

This is also particularly embarrassing for HMRC as they are seen as one of the leaders in print management in central government.  And there was the recent Whitehall Print Management contract awarded recently to Williams Lea by HMRC but re-badged as a new pan-Government contract. I doubt whether that is up and running yet, but might this problem be something to do stock management through the transition phase between two contracts?  Are the current printers annoyed because HMRC will be dealing through a print manager in the future rather than direct? Or are Williams Lea already the incumbent?

My journalistic instincts, finely honed over the course of – oh, almost 12 months now – make me suspect there may well be more to this than meets the eye.  Or is it just human error – in the case of most public bodies, I would guess that staff cut-backs might have led to errors creeping in, but you may also remember David Thomas, CPO at HMRC, saying that he wouldn’t have to cut numbers in his team. So no excuse there.

Anyway, it all emphasises the importance of good supply chain management, and how even the little details – like not ordering enough paper – can make a very good procurement function (which HMRC is) look not quite so clever.

And as always, comments welcome, particularly from anyone who knows more about this than me!

Voices (7)

  1. Final Furlong:

    A good point about the 6ft drums and the need to climatise the paper so it doesn’t clog up the presses, trimmers etc.

    Indeed, I recall seeing a submission on this blog alerting us to the notion that they (HMRC) still own in-house ‘printing factories’ which churn this stuff out (when they’re used of course…). And HMRC has recently led an exercise to outsource all of their print to a firm (Williams Lea) that has rid itself of such capabilities. Makes you wonder.

    Rather appropriately, those 6ft drums of paper look like giant loo rolls, thinking of the analogy that’s now entered my mind….

  2. PlanBee:

    When HMRC talks about buying paper, they dont mean reams of 80gsm A4 paper, but drums of the stuff that stand 6ft tall, that need a couple of days to ‘season’ to the ambient temperature before use and significant warehouse space.

    Its easy to imagine that there are no processes linking the departments processing the tax reminders to tell the print department that they were forecasting an upswing in the number of reminders that would be printed.

    As Peter says, a good case for good supply chain management, and forward planning of demand, that in this case seems to be missing

  3. Biscuity:

    The soon to be unemployed staff at COI haven’t had such a good laugh in ages. It is nice to know that they are being replaced by such efficient alternatives.

  4. Yersinia:

    Perhaps it’s that old case of JIT being NQIT as happened so often in the 80s.

  5. bitter and twisted:

    I suspect: Lateness decision to increase reminders + not expecting the unexpected (Stock is bad, M’kay!)

  6. David Atkinson:

    It all feels a bit 1980/90s but, doesn’t HMRC have some sort of kanban or VMI system in place? *grimaces*

    Then they wouldn’t need an employee to order paper….

  7. Final Furlong:

    I have to say that I’m puzzled by this one. (It’s taxing the brain to say the least.)

    I’m stunned that HMRC has actually employs someone (directly or otherwise) upon whom they rely for ‘ordering paper’ within one of their most critical ‘income protection’ supply chains (sending out tax reminders and getting people to pay their tax on time).

    What other strategic supply chain interventions do they manage? Checking the toner levels in the printers? Checking and replenishing the stock levels of DL envelopes within the stationery cupboards? Purchasing and attaching the stamps?

    One step forward, two steps back chaps…

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