Examination of Witnesses (Questions 60-72)
MR PAUL
GRAY, MR
MIKE ELAND
AND MR
DAVE HARTNETT
24 JANUARY 2007
Q60 Kerry McCarthy: When is the next
survey going to be published, the winter survey?
Mr Gray: I am sorry, I am afraid
I have not got a precise date but the measurement was around the
end of the year and it will be earlyish this calendar year.
Q61 Kerry McCarthy: There is talk
of industrial action at the end of the month in time for people
completing their tax returns. To what degree do you think that
is associated with problems arising from the merger?
Mr Gray: The ballot that the PCS
union ran in the early part of this month was a Civil Service-wide
ballot. It included HMRC along with all other departments, so
this was not an issue about HMRC specifically. Quite what impact
it had on PCS members within HMRC and how they chose to vote I
really do not know, but I think the key point is that although
31 January, the date of the planned one-day strike, is perhaps
a particularly significant date for our department given the self-assessment
deadline, we are talking about a context which is Civil Service
wide.
Q62 Kerry McCarthy: But would you
be able to identify then the factors that have led to staff within
HMRC to decide to join that industrial action?
Mr Gray: Not precisely no because
this has been a secret ballot process as appropriate.
Q63 Kerry McCarthy: If your staff
are going on strike, is it not important to have some idea of
why they have felt sufficiently motivated to take that decision?
Mr Gray: The factors which have
been identified by the union leadership in relation to the ballot
concern issues on Civil Service pensions where there has recently
been a Civil Service-wide agreement between the management and
unions on future pension arrangements; on pay where within HMRC
we have an agreed pay settlement that runs through to 2008; and
in relation to job security where we have been discussing some
of those issues and my colleagues and I are seeking to bring much
more certainty to our staff over time.
Q64 Ms Keeble: If you are managing
a big operation like the return of people's income tax forms and
it is a peak activity, as managers is it not really your job to
know what is likely to happen in terms of any industrial action
that might disrupt this key service?
Mr Gray: Yes it certainly is and
my responsibility is to ensure that we do everything we possibly
can to ensure that we maintain our levels of customer service,
notwithstanding the possibility of industrial action and, as you
would expect, my senior team and I have been putting in place
plans to ensure that we can maintain the service on that last
day for self-assessment returns to the maximum extent possible.
It is worth bearing in mind that you are not obliged to put in
your self-assessment return on 31 January, there is a period of
about 10 months in the run-up to that where this can be done,
so we are talking just about the last day. A number of people,
a number of tax agents do choose to take advantage of the last
day—and I am sure no members of the Committee would submit
their returns as late as that—but we will make sure that
we provide the best level of service we possibly can on that day.
Q65 Ms Keeble: Regardless of the
fact that everybody can have 10 months to put in their tax returns,
everybody knows it is left to the last minute. Have you got arrangements
in place so that if there is disruption to the service that there
will not be chaos around people's returns of income tax?
Mr Gray: Yes I have.
Q66 Ms Keeble: Most employers would
make sure that they know or they would find out pretty quickly
what the results are of a strike ballot otherwise you have got
problems.
Mr Gray: I have found out as quickly
as I possibly can. I was notified yesterday along with all other
heads of department of the results of the ballot. The ballot was
conducted, as I said to Kerry McCarthy, on a Civil Service-wide
basis. We have not been given a breakdown of the voting figures
between departments, so I knew as soon as anybody else did as
soon as the PCS announced the result yesterday lunchtime. I was
not waiting for the result of that ballot in order to make sure
in the event of a positive vote we had put in place business plans
to make sure we provided the best possible service we can, and
that is what we will do.
Q67 John Thurso: Your memorandum
notes that you have closed or part-vacated 58 properties since
the merger removing office space—and these are your words—"worth
£9.5 million in annual running savings". What savings
within that amount have actually been achieved in cash terms?
Mr Gray: The £9.5 million
is the value of the reduction in our estate costs from having
vacated or part-vacated those buildings, so that is a cash saving.
Q68 John Thurso: It is a cash saving,
in other words £9.5 million less cost, it is not an outgoing
any more?
Mr Gray: Yes.
Q69 John Thurso: Fantastic. Without
the merger, to what extent would each of the two sides, Revenue
and Customs, have been in a position to consolidate their individual
estates, ie how much is merger driven?
Mr Gray: I think to a much more
limited extent. We are looking in major towns and cities at the
plans for reducing the number of buildings we are occupying and,
as Members know, we are going through a series of regional consultations
now on that process. In a great many large towns and cities you
find that there are two quite large buildings, one of which was
occupied by the former Customs and one of which was occupied by
the former Revenue. Within the context of the merger it is much
easier for us to realise those estate savings because we are introducing
new business processes that mean we are having much more single
interaction across all the range of taxes for example, so I think
it is much easier for us to do it. It would have been possible
to some degree to do it previously but I cannot give you a precise
figure of how much that would have been possible because it is
a hypothetical question.
Q70 John Thurso: Can you indicate
how much of the estate is owned and available for sale or leased
and available to be let out as opposed to those properties which
cannot be either sold or leased out to others?
Mr Gray: The vast bulk of our
buildings are now owned by Mapeley under the contract that the
two former departments entered into in 2002 and under our contract
with Mapeley we have measures of flexibility under which we can
give notice to them that we wish to cease to occupy. So I think
the point that you are asking is really an issue for Mapeley as
our property provider in that we are in all those buildings paying
an annual service charge to them rather than now being the owner
or the leaseholder of those buildings.
Q71 John Thurso: What I am driving
at is very often in the private sector you take a decision to
relocate and that might work for the business and be more efficient
in lots of ways but you have sometimes got a residual cost until
the lease term runs out and unless you can sublet it you are stuck
with that cost. What I am fishing for is have you got those costs?
Mr Gray: We have not because a
key feature of the contract with Mapeley is that, in effect, we
transferred that risk to Mapeley because we had the right under
the contract to say "the following buildings this year we
no longer wish to occupy" and they are managing that risk.
At the same time our contract with them also provides that we
get an appropriate share of any development gain that Mapeley
would achieve if at some point they are able to sell and redevelop
the properties.
Q72 John Thurso: So when you say
that you can reduce the property size by 40%, effectively you
are able to do that without penalty?
Mr Gray: Yes. If we sought to
do it all on one day the contract does not allow that flexibility.
Over the period of years that we are talking about we can do that,
but in any given year there is a limit to how much property we
can give up without incurring penalties.
Chairman: Mr Gray, thank you very much
and we look forward to further information from you. Can we ask
you now to vacate as quickly as possible because there is the
Paymaster General in your place.
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