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NAO - Part 2

Friday, February 24, 2017

The NAO report was published on HMRC’s Estate Strategy in January. We issued a NEWS article on this site. We stated we would respond further after examining the report in more detail, HMRC comments and the views from members.


First it must be said and not unsurprisingly the HMRC response has been one of “judicious” interpretation and dissemination of sections of the report to staff and others. The report was debated in Parliament, a Q&A was used to staff and the Public Accounts Committee questioned HMRC senior managers.


We have already set out in earlier NEWS articles how we have come to where we are and why. These have focused on the internal HMRC emergence of the strategy now known as “Building our Future”. As has been seen the emergence of BoF in this format there has a long germination period where cogent and valid argument staved off the wilder aspirations but never managed to cork the genie entirely. However we must put things in the wider context of the Government strategy of the Public Estate. The following links are germane to that:


One quote in particular stands out: “but, in particular, in offices away from city centres.”


The NAO report states in paragraph 6 of the Summary:


HMRC’s strategic business case identifies three main reasons why it is seeking to move from a widely dispersed estate to regional centres:

  • It considers a different estate is necessary to support the wider transformation of its business. It sees regional centres as offering the right infrastructure and working environment to enable new digital ways of working for its customers and staff;
  • HMRC’s programme will support the wider civil service agenda to move to shared government hubs, supported by a regional network of mini-hubs; and
  • The end of the STEPS contract in 2021 provides an imperative for HMRC to act and an opportunity to reconfigure its estate on a large scale.


It is appropriate we address these points for now:


The wider transformation means in reality several things. Firstly it means internal reorganisation. This is currently mirroring the tenets set out by senior RCTU officers in 2014 – namely the coalescing of compliance into more homogenously distinct units (e.g. FIS and the LB move) and bringing compliance into more tight but effective units. The ISBC reorganisation has unfortunately seen the reinforcement of silos and the complete demise of specialist units. There remain concerns still that all of this has and will not produce the results that should emanate from such moves unless other factors are addressed – one that we know how to and ones that do not seem to be in evidence.


Secondly, and again as has been stated by the RCTU, addressing the need to define risk and how to address that whether it be by Prevent, Promote or, and this is a crucial factor, Respond. It is clear to all HMRC staff that we see an “evolving” risk picture and that BoF is not the way to address that. We are being extremely careful in what we say here so as to not jeopardise the work we all undertake.


We need modern offices and we need to offer a digital platform to honest customers that meet their needs. The current outcry from the accountancy profession and their clients shows this to be in doubt due to cost and HMRC dictates. Making Tax Digital is not receiving a welcome by the public users rather opprobrium.


Many of our offices are substandard and that is due to lack of investment, foresight, adequate understanding of the business and other factors over many many years. Modern offices are required – just not with “all the eggs in one basket” in an expensive city centre.


The wider Civil Service agenda is about fully utilising PUBLIC estates against required business models – even those who are being “modernised”. What is clear and in line with business models and hard evidence is that where the HMRC BoF agenda fails (not only in the extreme cost per square metre of “central locations”) is the failure to understand COMPLIANCE. This is something repeatedly stated in the NAO report that is a risk and must be addressed.


Compliance is about HMRC working with other agencies in particular in the future – especially those on Local Government. That is where co-location with external public bodies is a must. We need to deploy staff quickly anywhere in the UK – something that BoF will not achieve. The recent talk about “strike force” and “brigading” is fanciful and dangerous as there are so many factors that will show this as near impossible to achieve with many negative factors.


The end of STEPS is to be welcomed but are the cost savings that are in the so called business case real. Already we know that money was running out for the first BoF projects and we know corners are being cut – specialist functions in need of secure areas are now in open plan with screens being placed to “break up” the room. This is completely unsatisfactory and demonstrates - if staff need more proof - just how out of touch senior leaders are with the reality of the jobs we do.


We challenge the statement made to the PAC that there will be better compliance outcomes (not that it was not an honestly held statement but that we do not believe it to be the true situation) – we - who know the work - do not see that at all by any of the measures we know about – even the ones that are known to only a very few people. We are aware of the ever more inventive ways of counting yield that are being proposed. The fact that tax receipts are high has to be seen in the current growth in the UK. There is evidence of sustained large scale growth in fraud and evasion let alone carelessness that is not being addressed as it should be. We vehemently disagree with 6000 compliance staff cuts by 2022 with increased yield as per the last Spending Round proposition – it is completely preposterous!!


It is not too late but that potential point of no return comes ever closer. Staff feel overburdened with bureaucracy inhibiting productivity and dismayed how loyal long serving staff are being treated either by BoF or increasingly abstract interpretations of HMRC’s own guidance to their detriment.


As for where 42 locations came from - well and we know more than most – but that was a new one to us – but hey bound to be some corner we have not explored.


BoF is not a success story – the vast majority of staff feel it is wrong and for good reason – it threatens HMRC and they remain, despite all, proud of the work they do and, surprisingly, of HMRC ( they are really not sure about the leaders though if we are being honest).


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