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National Audit Office Report – HMRC

Tuesday, January 10, 2017

 

The National Audit Office (NAO) has released the report on Managing the HMRC Estate.

 

https://www.nao.org.uk/report/hmrc-estate/

 

The main comment from the NAO is:

HMRC has improved the handling of its current contract with Mapeley and achieved better outcomes, though significant risks remain. Looking ahead, HMRC has acknowledged its original plan for regional centres was unrealistic and is now re-considering the scope and timing of the programme. It should step back and consider whether this strategy still best supports its wider business transformation and will deliver the sustainable cost savings it set out to achieve in the long run.”

Amyas, head of the National Audit Office, 10 January 2017

They then comment: (we have italicised the most important, to our mind, sections)

“During the transition to regional centres, HMRC recognises it must not impair its service to taxpayers or its ability to collect tax revenue. HMRC has concluded that its original plan was unrealistic and carried too high a risk of disruption to its business as it involved moving or replacing too many staff too quickly while delivering 14 other major change programmes in parallel.  Since it submitted its business case for the 2015 spending review settlement, HMRC’s estimate of its estate costs over the next 10 years has risen by nearly £600 million (22%), more than half of which is due to higher than anticipated running costs for its new buildings.

HMRC is now re-considering the scope and timing of its moves to regional centres to reduce the costs and the risks of disruption over the next four years. Its options include: changing the timetable for opening regional centres; re-considering the functionality, location and size of some regional centres; and re-assessing how and when to introduce flexible ways of working.  HMRC must manage the risk that such changes compromise its objectives to improve the engagement, morale and productivity of its workforce while achieving sustainable savings in the cost of running its estate in the long run.

As some of the moves to regional centres will now happen later than HMRC had planned, it will be longer before savings from its new estate are realised, but HMRC still expects the moves to provide better long term value for money. It estimates cumulative efficiency savings by 2025-26 of £212 million, reduced from £499 million from its November 2015 business case.  By 2025-26, HMRC expects its annual estate running costs to be £83 million lower than they are now.

HMRC has yet to define fully how regional centres will support better customer service and more efficient and effective compliance activities. HMRC has signed the contract for its first regional centre in Croydon, but faces a demanding timetable to occupy the site as it plans in 2017.

The NAO believes that HMRC must manage the risk that it locks itself into long term property deals which limit its flexibility to change its future business model. The NAO notes that HMRC is now implementing its third major change programme since the merger of the Inland Revenue and HM Customs and Excise in 2004. It has not negotiated any break points in the 25 year leases it has signed so far in Croydon and Bristol. HMRC aims to provide flexibility through a mix of lease terms across the estate, maintaining the ability to sub-let to other departments, and working with the Government Property Unit to provide for future flexibility in the design of cross-government hubs.

Among the NAO’s recommendations is that HMRC should improve its control of the costs of the new regional centres and demonstrate how in practice these centres will help its employees provide a better service to customers while increasing the efficiency and effectiveness of its compliance work.”

What is clear and agrees with our information sources is that what we have said since 2013 is correct.

 

  • That the business case, in the round, was absent.
  • That the case that was made, at best, was ambiguous
  • That compliance, in the round, was at extreme risk.
  • That the programme, including digital, was predicated on too many unknown and potentially unrealisable factors and variables.

 

The outcomes from this and how to change (including a modern future that did work and did realise extra compliance – money to the Exchequer – and cost savings) them were written and published in 2014 by senior RCTU officers. Many facets of OUR PLAN have attempted to be adopted by HMRC BUT without our background knowledge and input these are still, at best, half hearted attempts to change.

 

We formally call upon HMRC to engage with the RCTU now.

 

We take no pleasure from the vindication we have received from the NAO report; we need to change but change in a manner that works for taxpayer and staff – as we have maintained since the formation of the RCTU.

 

Only by joining the RCTU will YOU have the say YOU deserve.

 

We have never seen such disorganisation or morale at such a low ebb nor the creation of posts at such high grades that are inimical to the numbers of compliance staff that are required – it diminishes and wastes resources and is, we must say, detrimental to the actual compliance effort required.

 

We need:

 

  • More compliance staff – not less as per their “plan” – some of the “savings” are predicated on this – 6000 less compliance staff by 2021/22. Based on assumptions that have been exposed, to a degree , in the NAO report.

 

  • An estate that is based on the reality of RESPOND –we know that new senior leaders have asked this question – some of the answers they could be given are quite frightening we believe and equally are unworkable in reality.

 

  • Staff that are paid in line with what is expected of them in a modern context – allowances for flexibility and for continually “going the extra mile(s)” for HMRC and the UK. The case for better pay is overwhelming and we can make that case.

 

How?

 

The RCTU knows how – we have been proved correct so far and have the plans to deliver this.

 

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