The powerful Public Accounts Committee has questioned whether the 10-year scheme to reduce HMRC’s 170 offices to 13 regional bases in city centres, along with four specialist centres and a London headquarters will deliver the expected economies.
MPs on the committee which scrutinises spending plans also raised concerns that closing down offices would damage local economies, with some offices being major employers in the areas, the Telegraph reports.
In 2015-16 HMRC spent £269m running its estate, which accommodates almost 60,000 staff. The organisation is a year into the decade-long consolidation plan that it says will cost £500m but will deliver cumulative savings of £300m by 2025-26, with annual savings of £80m a year after that.
The scheme will also require 38,000 staff having to move office and HMRC believes 5,000 workers may quit rather than face the upheaval of relocating.
But MPs on the committee used a report to raise doubts over how well thought through the plan is, saying HMRC “has yet to demonstrate it has a realistic and affordable plan to deliver such a radical change to its estate, and we do not believe that it needs to be based in expensive cities across the UK”.
Examples included plans for bases in expensive Cardiff rather than nearby and cheaper Swansea, and Leeds rather than Bradford, which has lower costs and is already the site of an HMRC office.
They also questioned how big a saving it will create, noting in 2015 HMRC forecast economies of £499m, but a year later reduced this to £212m, but has since updated this to £300m.
How disruptive the move will be on the job of collecting tax is another concern, with MPs noting that it is one of the biggest organisational change programmes in Europe and also comes as the UK goes through Brexit.
They also flagged worries about 5,000 staff leaving and taking their valuable experience with them rather than relocate, adding: “HMRC accepts this loss of staff will drain corporate memory and expertise, and does not yet have a solution.
“It already experiences too high a level of staff turnover with 5,000 to 6,000 staff leaving a year and it will take time to recruit and train staff in new regional centres.”
Further concerns were cited about economic impact of closing offices in towns were they have a major presence, as well as extra pressure being put on already overcrowded transport networks in cities where the new offices will be located.
The committee said that HMRC having already changed its plans for a major hub in Stratford, east London, illustrated that its original scheme was unlikely to deliver the savings initially hoped for.
A spokesman for HMRC said: “We are considering the committee’s report and will respond in due course.”
