PCS says “No” to Privatisation in HMRC

PCS is stepping up the fight against HMRC’s move toward privatising key customer contact services and has met MPs to challenge the outsourcing plans.

This week, representatives from the PCS Revenue and Customs group executive committee (GEC) met with MPs in Westminster to outline the risks posed by the department’s renewed push to outsource telephony and customer service functions.

Several MPs, including PCS parliamentary group chair John McDonnell, heard first‑hand why PCS believes HMRC’s managed service provider (MSP) pilot represents a serious threat to service quality, transparency, and public accountability.

A return to outsourcing - despite past failures

HMRC launched a pilot in 2025 using private sector MSPs Hinduja Global Solutions (HGS) and SERCO to handle online helpdesk and PAYE customer calls. This marked a clear reversal of earlier commitments to avoid outsourcing frontline customer contact after multiple failed attempts in previous years.

HMRC now plans to expand MSP involvement during peak periods, even though the full evaluation of the pilot, agreed jointly with PCS, is still underway. PCS warns that the department appears to be pre-empting this evaluation entirely.

The union expressed alarm that HMRC’s executive committee intends to make decisions before the review is completed, undermining evidence-based policy making and risking a repeat of past outsourcing disasters.

Early warning signs: accuracy already falling

Despite the pilot’s early stage, internal messages from HMRC raise concerns. In a February update, HMRC admitted that:

  • MSP procedural accuracy stands at 50%,
  • 23 percentage points lower than in-house teams,
  • With errors “driven by additional security check failures.”

PCS argues that these early results confirm what past evidence has consistently shown: outsourced call handling leads to lower accuracy, poorer training, weaker employment conditions, and higher turnover — all of which damage the quality and reliability of public services.

Contradicting government promises

The government recently declared its commitment to delivering the “biggest wave of insourcing in a generation.” PCS states that HMRC’s move is directly at odds with that pledge.

The union also highlights the serious operational and reputational risks of handing taxpayer facing services to companies whose commercial practices HMRC cannot fully control. PCS has documented troubling management practices among contractors previously used by HMRC, warning that the department risks significant reputational damage if problems reoccur.

A clear message to MPs

PCS delivered a simple but urgent message at Westminster: outsourcing HMRC customer contact has been tried before - and it failed.

Independent reviews by the public accounts committee (PAC) and the National Audit Office (NAO), alongside HMRC’s own leadership assessments, have repeatedly found outsourced telephony to be:

  • Unsafe
  • Inefficient
  • Poor value for money
  • Harmful to vulnerable customers.

PCS warns that committing to expand the MSP model now before evidence is even gathered risks repeating expensive failures that previously cost millions and damaged public trust.

What PCS is asking MPs to do

The union called on parliamentarians to take immediate action:

  • Raise concerns with the exchequer secretary to the Treasury
  • Ask the government to halt further MSP expansion until the joint PCS–HMRC evaluation is completed
  • Question outsourcing contracts in parliament
  • Challenge the value of MSP contracts compared to in-house delivery.

PCS will continue working closely with MPs to expose the dangers of outsourcing and to defend the vital public service role provided by our members.

Get involved

Act now and write to your MP asking them to support our demands and write to the financial secretary to the Treasury and to HMRC leadership.