Government will not publish the assessments on closing HMRC local offices

There was a debate about HMRC’s “Building our Future” programme which sets out to close 137 offices and centralise in 13 large regional hubs and four specialist sites. HMRC will keep open a limited number of transitional sites, for several years. Labour and SNP MPs spoke in favour of a pause to the programme, with Conservatives keen to continue it.

The debate was obtained by Cumbernauld MP Stuart McDonald (SNP), who said the implications for a town because of the closure of its HMRC office should ‘form part of the Government’s thinking’. He wants a pause to the programme to enable greater scrutiny and reflection. HMRC’s estimate of the costs over the next 10 years had risen by £600 million—more than half of which was due to higher than anticipated running costs for new buildings. Similarly, estimated cumulative efficiency savings to 2025-26 had fallen from £499 million to £212 million. The Government is opting to buy into ‘inflexible situations’, with 25-year leases apparently signed without break clauses, McDonald said.

A number of other SNP MPs also spoke. The SNP is in the process of conducting its own assessments of the impact of the programme on Scotland, said Lisa Cameron. Chris Stephens, chair of the Public and Commercial Services Union (PCS) parliamentary group, said HMRC is losing a vast amount of irreplaceable experience. Based on data provided to the PCS by HMRC, in 2017 alone the department will lose the equivalent of more than 17,000 years of staff experience, and the vast majority of that comes from customer compliance work. He wants the Government to publish assessments for each closure, saying ‘there is no excuse for hiding them away from scrutiny’. The Government confirmed to him in a written answer in June that it would not, and had no plans to, fill the 83 current vacancies in the HMRC minimum wage compliance unit. The landscape has changed immensely since the Building our Future programme started, such as Brexit, he added.  Gerard Killen said the combination of Brexit and the devolution of increased powers over tax and income bands to Scotland, it is exactly the wrong time for HMRC to consider scaling back its operations.

A number of Labour MPs with constituencies affected by the office closures spoke. Shadow Chief Secretary to the Treasury Peter Dowd was disappointed that Mersey Travel, the Cheshire transport authority and the Welsh transport authority were not contacted when it was decided to close the tax office in Bootle in favour of a regional hub in Liverpool. Imran Hussain said it would have made sense for HMRC to put high-quality, high-wage jobs into areas where there is a deficiency of those jobs rather than centralising those jobs in city centres. David Drew wants an investigation into those areas that have already lost offices through the previous NOS programme. John Grogan found it odd that only one of the eight location principle to decide on regional hubs—market rates—has anything to do with cost and savings to HMRC. He said it seems very negligent that not much social and economic impact assessments have been carried out about the office closures, such as ‘rural proofing’. Jim McMahon said there was no value-for-money assessment about the HMRC relocation from Oldham to Manchester. “Why would HMRC relocate from a town where the average office cost is £70 per square metre to a city centre where the average cost is £120 per square metre?” Paul Williams said HMRC have responded to long call time waits by hiring more call handlers on short-term contracts, but ‘because those people have so little experience, he is told that the people with more experience spend a lot of their time supporting the people on temporary contracts, and overall that puts an already overstretched workforce under more pressure’. Hussain agreed with him that the consistent message that value for money reviews were not carried out when offices were relocated, probably warrants a referral to the National Audit Office.

A Conservative, Luke Graham, said combining HMRC staff and skills resources in regional hubs will enable HMRC to improve customer support and Making Tax Digital is an example of how people’s interaction with the tax authority is changing, in any case. Graham said is important that HMRC proactively looks at outreach schemes to ensure smaller towns and villages still have access to HMRC facilities and services, especially are with poor broadband connectivity.

Financial Secretary to the Treasury Mel Stride said the Government will have some cost avoidance of £75 million per annum from 2021 through getting out of the private finance initiative arrangement with Mapely, and on top of that HMRC will have £300 million-worth of savings over the next 10 years, and we will have annual cost savings of £74 million in 2025-26 compared with 2015-16, rising to around £90 million from 2026-27. He said 90 per cent of current HMRC employees will either work through to retirement at that office or migrate to working at the new hub. He was adamant hat he is not going to commit to bringing forward ‘all sorts of reports and things’ that MPs have asked for on the programme today because the Government have published the criteria on which the decisions were made. “It does not necessarily follow that more offices mean more tax collected. I think quite the reverse. We need centres of excellence [to manage] a risk-based approach to clamping down on tax avoidance, which involves a lot of data and analysis from the centre.” He declined to answer in the Hall a question on whether HMRC intend to increase or reduce the number of employees in the High Net Worth Unit. HMRC is now open to take calls from customers and engage in webchats seven days a week.

The full debate can be read here.

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