§ Mr. Matthew Banks
To ask the Chancellor of the Exchequer if the next steps review of the Inland Revenue is now complete; and if he will make a statement 
§ Mr. Jack
The review of the Inland Revenue's next steps arrangements was announced in December 1994, and has been carried out in accordance with the normal 651W arrangements for periodic reviews of next steps bodies. Two of the three elements of the review have now been completed.
The first element of the review required consideration of what are known as the prior options—abolition, privatisation, contractorisation or market testing of all or part of the Department's functions and reconsideration of its organisational structure. The review concluded that there is a continuing need for all the Department's core functions and that the wholesale privatisation of the work of assessing and collecting tax would not be appropriate, but the review also noted that the private sector has played and will continue to play a significant role in the delivery of the Department's business.
Approaching 25 per cent. of the Department's annual running costs have already been contracted out, market tested or benchmarked against other market tests, and the Department's outsourcing contract for information technology services represents one of the largest such public sector arrangements in the world. The review reaffirmed the Inland Revenue's commitment to continue to search for further ways of involving the private sector either directly or indirectly in its work.
The prior options review also concluded that the existing organisational structure based on a number of operational and service executive offices remains sound, and is right for the Inland Revenue.
The second element of the review required evaluation of the effectiveness of the existing arrangements and scope for further improvements. That element took stock of the performance of the executive offices against their objectives and key targets, analysed their relationship with the centre of the Department and considered how existing arrangements might be improved. The results have been very encouraging, showing a marked improvement in performance since the establishment of the executive offices in April 1992, but areas for further development and improvement were identified and will be pursued.
In the light of the findings of the review, the framework documents, which set out the policy and resources framework within which each of the Department's executive offices operates, and the authority, responsibilities and accountability of the controllers, are being revised.