Memorandum from Public and Commercial
Services Union (PCS)
The Public and Commercial Services union (PCS)
represent over 80,000 members working in HMRC. We have serious
concerns about the STEPS contract and would be grateful if these
could be considered at the committee's meeting on 20 January.
By transferring ownership or leases of around
60% of its estate (591 properties) to a private contractor, Mapeley,
in 2001, the Inland Revenue and HM Customs & Excise planned
to reduce their running costs and had the opportunity to save
up to £1.2 billion by reducing the size of the estate. PCS
are concerned that the contract does not contain an "escape
clause"—an interim period during the life of the contract
at which point HMRC could renegotiate or cancel it. It is concerning
that, in this instance, it runs for a full 20 years.
When the contract was negotiated, the financial
climate was very different to what it is now. We are concerned
that no consideration had been given to the possibility of such
a significant economic downturn.
The previous financial returns experienced as
a result of huge leaps in property values is not now being enjoyed.
The returns that were available no longer exist in the same way
and consequently will impact on Mapeley's financial stability
and possibly their ability to deliver the contract as set out
within the terms of the contract.
HMRC are pressing ahead with their Workforce
Change programme and on 13 January announced the closure of 130
offices, affecting 3,150 staff. These closures will be costly
and will increase the financial and resourcing pressure on the
department which is particularly concerning at a time when vast
amounts of taxes remain outstanding and the tax gap is estimated
to be £100 billion.
The office closures will also have a financial
impact on Mapeley. Given that they received financial assistance
from the public purse during the first year of the contract and
have only recently gained financially stability, the timing of
the announcements to close these offices and the impact on Mapeley
needs to be seriously considered by HMRC.
QUESTIONS FOR
CONSIDERATION BY
THE PAC
— HMRC has just announced it is spending
tens of millions of pounds to close 130 offices.
— How much money has been set aside or
is available to pay for the early releases and redundancies required
to deal with the 3,150 affected staff? What will be the estates,
IT and extra travel costs of moving staff to other offices?
— How much money does HMRC expect to save
by closing these 130 offices? If the Department expects to save
hundreds of thousands or even millions of pounds by closing these
130 offices—what strategy does Mapeley have to cope without
that income?
— Has Mapeley been consulted on the closures
and given sufficient time to implement plans to tenant the empty
buildings and retain an income from the estate?
— It is noted that the Department needed
to bail out Mapeley within a year of the contract being signed.
If Mapeley's financial position were to struggle, what would the
Department's response be? If HMRC were able to assist Mapeley
financially, how would this be funded?
— If the company was to fail what effect
would this have on the HMRC estate?
— The National Audit Office[12]
report highlights the STEPS contract being comparably lower than
other Departments due to the number of regional offices within
the Estate. With the Workforce Change office closure programme
likely to reduce this number, is it the case that HMRC still getting
value for money?
— HMRC is criticised for not considering
Mapeley's profits during the Workforce Change programme. What
are the impacts of Workforce Change on Mapeley's profits?
— Why has HMRC not committed sufficient
resources, commercial and legal, to managing the contract? What
effect will job losses have on this area of work?
— Given that value for money is not going
to be realised for the lifetime of the 20 year contract, why was
an "escape" clause not negotiated at the time?
— Are HMRC aware of Mapeley's banking and
tax payment arrangements? Mapeley bank off-shore, thus depriving
the Exchequer of income. Can HMRC provide assurance that monies
paid by them under the STEPS Contract which attract tax, are banked
in the UK?
19 January 2010
12 National Audit Office report-HM Revenue & Customs'
estate private finance deal eight years on-10 December 2009. Back
|
