HMRC closure plans 'unrealistic'

10 January 2017

HMRC's plan to close almost all of its 170 UK offices is "unrealistic", the government's spending watchdog says today.

We have repeated our demand that the proposals are immediately halted to allow for parliamentary and public scrutiny, in light of the National Audit Office's findings.

The plans announced in November 2015, which would mean a move to 13 regional centres, are already expected to cost more and will lead to large areas of the country being miles from a tax office.

In a damning report published today, the NAO says:

  • The original plan was “unrealistic” and HMRC now estimates it could mean 5,000 of the 38,000 affected staff losing their jobs, a higher proportion than initially suggested. Overall HMRC plans to cut another 8,000 staff by 2020
  • Estimates of the total cost of the new estate over 10 years have risen by almost £600 million, an increase of 22%
  • The estimate of the cost of redundancies and reimbursing staff for travel to the new offices has risen to a quarter of million pounds, including estimates for travel costs more than trebling from £17 million to £54 million. We believe the actual figure is likely to be even higher
  • HMRC “has yet to demonstrate how in practice the regional centres will help its employees provide a better service” and tackle tax evasion and avoidance
  • More than one year on from the plans being announced, and with the contract signed for its first regional centre due to open this summer, HMRC “does not yet have an agreed programme business case”
  • The timetable for closures has been driven by a troubled private finance deal HMRC has with contractor Mapeley, and more than 15 years on from this being signed “significant risks remain” in the handling of the contract

Publishing ‘HMRC: building an uncertain future’ at the end of last year we said the plans should be stopped so MPs could fully consider them and so the public could be properly consulted.

Our report included survey responses from staff that showed 73% thought the closures would have a negative impact on HMRC’s ability to collect tax and more than half said they would damage the department’s efforts to clamp down on avoidance and evasion.

Commenting on today's NAO report, our general secretary Mark Serwotka said: “With costs rising and the cracks beginning to show, it is now imperative that HMRC halts these plans and allows MPs and the public to have their say.

“Cutting thousands of HMRC staff in recent years has hit the services it provides to the public, yet the department and this Tory government are ploughing ahead with poorly thought through plans that would mean thousands more job cuts.”

Following the publication of the report, which mentions HMRC's plans to close 137 offices by 2021, shadow chancellor John McDonnell asked an urgent question today in House of Commons on the HMRC estate and described the department's plans as an "emerging disaster."

He rightly called on the minister to halt the plans, end the job cuts and "come back with a realistic plan to fully resource HMRC."

This is on the same day that the influential parliamentary public accounts committee invited submissions for an evidence session about the HMRC estate on 25 January.

Download our report into HMRC

Read what the NAO has to say

Updated at 1.06pm on 10 January.

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