The National Audit Office issued a statement last night saying:
By reducing the number of its offices and moving to a regional centre model HM Revenue & Customs (HMRC) hopes to significantly reduce its running costs and modernise the way it works. However, in a report released today, the NAO stated that HMRC has recognised that its original plan was unrealistic and is considering how it can adjust the scope and timing of the programme to reduce the cost and delivery risk. Any changes will need to be carefully managed to avoid diminishing the long term value of the strategy.
I have long criticised this HMRC plan.
It took tax out of the communities where it belongs.
It denied people access to a tax office.
It was bound to cause massive disruption to HMRC staff.
It was going to cost HMRC many of its most experienced staff who would not want to move late in their careers.
It was a massive threat to good governnance: the risk was that there would be few staff transfers between the remaining offices and distinctly different work practices, errors and prejudices, fundamentally threatening the supply of a national tax service on a consistent basis.
For all these reasons it was a disaster in the making from the outset.
Supposedly the change in plan is down to property related issues but its clear that is not really true. As the NAO says near the end of its report:
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.
In other words, HMRC has no idea why its doing this reorganisation, what it will gain from doing it or how to do it. As a definition of failure goes that is pretty spectacular.
As I have said many times before, HMRC does not have a senior management fit for purpose. That is because they do not put the provision of fair taxation for the benefit of the people of this country at the heart of their thinking. If they had this plan would never have seen the light of day. Now it needs to be scrapped, and HMRC's senior management needs to depart along with it to be replaced by a management team that believes that tax is at the heart of society and that delivering fair tax is fundamental to the creation of a society in which all have a chance. And that means there has to be a tax office in every significant town in this country because tax justice is not possible otherwise.
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HMRC can’t say why it is closing office. It is because of the disastrous Mapeley STEPS privatisation of its estate, which leaves its premises owned by a Bermuda based tax avoider which can evict HMRC or charge what it likes from 2021.
“HMRC has yet to define fully how regional centres will support better customer service and more efficient and effective compliance activities.” because they won’t. It continues to pretend that it will be efficient to deal with a plumber trading cash in hand in Norwich from the nearest surviving office in Birmingham “digitally”. Yet it claims staff in Coventry could not possibly interact “digitally” with staff in Birmingham and so it would be efficient to co-locate them.
I agree with all that
I agree with you.
The changes to the HMRC – no doubt sponsored by Mother Theresa – are to me just a form of signalling to external ‘investors’ (tax dodgers) that Britain is open for business and is a handy place to store their ill-gotten gains.
This will end up being our biggest industry in the future no doubt.
Unfortunately it seems as if the senior managers are going to just close their eyes and keep running head on into the regional centre programme.
I think in London at least this ties in with the tragic selling off of beautiful and historic buildings so the government can gain a quick buck and use what are essentially “capital” proceeds to pay for “revenue” government expenditure. Meanwhile these former public assets become soulless hotels.
Having read the BBC article [1] the business case does not make sense. What CEO running a multi-billion £ empire would seek to save, at best £83M p.a. in 10 years time for an outlay in excess of £600M, by disrupting most of its resources (staff) when it can earn that sum by a small increase in sales (tax). There is a privatisation going on here; will or when will the properties be privately run, will staff have new employment contracts? Another wealth give away?
[1] http://www.bbc.co.uk/news/business-38555938
It is actually worse than that – the £600m is the increase in the cost of the programme. The current estimate by the NAO is that the total cost will be £3,243m
Between November 2015 and September 2016 the HMRC model has increased the investment cost by £175m or 42%. At the same time the payback has gone out from “at most 11 years” to 14 years on their current assumptions
Project appraisal skills not a HMRC speciality?
Nor is tax collection at its management level
When I was in Customs and Excise there was a network of about 100 LOCAL VAT offices and the local knowledge was invaluable in detecting who were the defaulters. It also enabled on the spot inspection of business premises and records and face to face meetings with traders – which assured the integrity of the tax. In those days the term “tax gap” was unknown, with these plans to close most offices it seems that HMRC management, presumably with Government approval, are quite content to write off whatever the tax gap figure is (I know Richard has debated its size) in order to reduce costs and staff numbers – regardless of the impact on revenue collection.
And those VAT offices put the fear of God into people
Made redundant in 2016 along with over circa 250 colleagues in the last few years from my office which closed . Whilst a drop in the ocean, the tax no longer being collected by those experienced staff is colossal and shameful.
Utterly absurd: I agree