Datagate

ICAEW chief executive Michael Izza, reacting to the release of the interim report by PwC CEO Kieran Poynter on "Datagate", said:

"In tandem with the next stage of this review, we believe government should look at the day-to-day operation of HMRC and ensure that it is properly resourced to deliver.

Until this happens, there should be a moratorium on any further job cuts."

Wrong!

The most effective way to turn around the underperforming and failing HMRC is to simplify the tax system, and hence simplify the bureaucracy and cut the staff/hierarchies within the HMRC.

A Contradiction In Terms

On the assumption that the Financial Reporting Council (FRC) really is the independent UK regulator responsible for promoting confidence in corporate reporting and governance.

How can Eric Anstee's (ex CEO of the ICAEW and newly appointed chairman of IFA) appointment as a non-executive director of the new board of the Financial Reporting Council provide a leg up for IFA, as IFA president Professor David Hunt states?

Independent bodies do not provide leg ups.

The Transparent Council

Over the recent weeks (most especially after having met and had lunch with Michael Izza CEO of ICAEW), I had begun to feel that maybe the ICAEW had finally started to get the message from its members and that it was genuinely trying to make itself more accountable to the membership, relevant and fit for purpose for the 21st century.

Unfortunately that feeling of optimism was blown away when I read Richard Dyson's (President ICAEW) piece in Accountancy (December 2007 page 113) entitled "Seeking Council".

I would provide a link to the piece, but Accountancy haven't entered the 21st century either and don't have it on their website.

In brief, Dyson extols the virtues of the ICAEW council; noting that "council's work is too often unnoticed and unsung..."

Well, there is a very good reason for that; none of the membership are told what council discusses!

In brief I will summarise why I totally disagree with Dyson's views:

• As I have stated on this site on many occasions, the size of council (over 90 people) is absurd (see Best in Class). Dyson attempts to justify the size of council by saying:
  
  "..once a body is larger than, say 15 people, it doesn't really make any difference if it's 30, 60 or 90 strong.."
  
  Clearly he doesn't get it, council should be less than 12 people (as I have outlined on numerous occasions) if it is is to be effective. Following Dyson's "logic" we may as well increase the size to include every member.
  
  I would note that were the same proportion of MP's, compared to the population of the UK, to sit in parliament as there are council members to ICAEW members, we would have a parliament of 42,857 MP's.
  
  Would that be an effective body?



• Dyson proudly states how the ICAEW have made progress, and have tried to make council meetings more transparent and open to scrutiny.
  
  That being the case, why can the membership of the ICAEW not access transcripts of council meetings?
  
  I did raise that question during the ICAEW's abortive merger campaign, and got a very irate email from one member of council who informed me that the minutes of the meetings should not be available to the membership as the were "confidential".
  
  Ah yes, progress indeed!



• Dyson concludes by inviting prospective council members to contact him.
  
  Now I know where I went wrong, when I attempted to stand for council at the beginning of this year. Had I contacted Dyson, then maybe the ICAEW would not have refused to let the Croydon membership know that I was looking for nominations.

Why does the ICAEW claim to be international, yet council elections are decided on a local basis?

Why does the ICAEW insist on prospective candidates for council needing 10 signatures from the local area, before they are even allowed to stand?

Why does the ICAEW need 90, or more, council members?

Operating a Victorian trading association model simply will not do for the 21st century.

Until the ICAEW gets that point it will go nowhere.

Judging from the self congratulatory tone and contents of Dyson's article, it is evident that the ICAEW still doesn't get it.

Jobs For The Boys

Dennis Howlett raises a very good question about why is it that the Tax Faculty of the ICAEW, rather than the IT Faculty, are commenting on the recent data loss fiasco by HMRC.

I agree with Dennis, the ICAEW have "missed the mark" on this:

• They should have responded as a body as whole, not allowing an individual faculty to answer



• Their support of a formal independent review, as Dennis rightly points out, begs for yet more tax payers' money to be poured down the ever open gullets of the big four consultancy/accounting firms; producing no real value whatsoever



• The failure of HMRC is down to lax systems and lax attitudes; not costs savings targets, rightly imposed by the Treasury

However, that being said, the most effective cost savings wrt HMRC can only be made when Gordon Brown allows Darling to dramatically simplify the tax system; eg set a single rate of tax, eliminate Inheritance Tax and CGT etc etc.

This is where the ICAEW should be pushing the government, and this is the case that they should be making, not "fannying around" asking for consultants to be hired.

A missed opportunity.

HMRC

The ICAEW recently asked for examples of HMRC issues, www.hmrcisshite.com may provide them with some light relief whilst they plough thier way through the technical stuff.

HMRC Is Shite is dedicated to the taxpayers of Britain, and the employees of the HMRC, who have to endure the monumental shambles that is Her Majesty's Revenue and Customs (HMRC).