HMRC land and property sell-off ‘will not raise as much as expected’

28 Apr 17

Government plans to sell off surplus property and land owned by HMRC will not raise as much money as expected, the Public Accounts Committee has warned.

Today’s report on the restructure of HMRC said the decision to reduce its 170 offices nationwide to 13 large regional offices is unlikely to save the hundreds of millions outlined by the government.

In 2015–16, HMRC spent £269m running its estate.

It forecasts that implementing its plan for a new estate will need an investment of over £500m over the next 10 years.

HMRC says the plans will help it achieve cumulative efficiency savings of more than £300m in running its estate by 2025–26, and £80m a year thereafter.

But the report states: “We do not believe that it will save as much money as HMRC has predicted and we are concerned that it has not thought through all the negative costs to the wider economy of its approach and the impact on local employment.”

MPs called on HMRC to reconsider whether moving to expensive city-based centres offers best value for money.

They remarked that HMRC had chosen to locate its Yorkshire office in Leeds, despite being more expensive than Bradford, where many HMRC staff already work.

Concerns were also raised about the disruption to HMRC’s core objectives, as the government predict that 38,000 of its 58,600 staff will see their workplace move leading to as many as 5,000 leaving.

The report stated: “HMRC must prioritise the continuity of tax collection and customer service during office closures and the moves to regional centres, and identify how it is protecting its operations from the risk of business disruption”.

MPs urged HMRC and the Government Property Unit (GPU), set up to oversee all government estates, to work together to ensure future contracts include a mix of medium- and long-term leases that provide flexibility for regional centres and hubs so that the government estate can adapt to future changes in the way departments work.

The GPU, which is part of the Cabinet Office, is planning to launch a new agency - the Government Property Agency - to manage its properties from September but the committee remain unconvinced that it will provide “value for money”.

Today’s report follows the publication of research by the National Audit Office, which said the GPU was “struggling” and the government could save a lot more by restructuring its overall estate.

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