Supplementary memorandum from HM Revenue
and Customs, HM Treasury and Office of Government Commerce
Question 15 (Chairman): What do the treasury say
to this? Do you think you can now ensure that departments have
the right commercial skills for this type of contract in the future?
Have you learned from this?
RESPONSE FROM
HMT AND OGC
OGC agrees that complex public sector projects
can only be delivered on time and to budget if the best calibre
of expertise is recruited, maintained and continuously developed.
As a result, OGC regularly modifies its guidance to help departments
meet this aim.
OGC has three main initiatives in place, or under
development, to improve the commercial skills within departments:
— Improving recruitment, retention and
development of commercial expertise across departments through
implementation of the Building Procurement Profession in Government
Strategy, published by OGC in June 2009, and raising the status
of the procurement profession.[13]
— Assessing departmental capabilities via
the Procurement Capability Review Programme. The results of the
first round of reviews showed that departments are improving their
procurement capability in the areas of resourcing and skills,
contract and supplier management, and influencing major projects.
Departments have since built on these improvements against a structured
improvement plan supported by OGC.
— Project assurance via the Gateway Review
process[14]
has been strengthened so that it pays greater attention to procurement
capability and confidence of delivery. OGC has also launched a
programme and project management competency framework that sets
out the key skills needed to successfully deliver complex projects.
Question 67 (Dr Pugh): of those 130 properties,
how many are leasehold, how many freehold?
Of the 130 properties announced for closure
on 13 January, only 102 properties are held by Mapeley under the
STEPS contract. Of these 56 are leaseholds and 46 are freeholds
that were transferred to Mapeley in 2001 as part of the STEPS
deal.
Questions 77-78 (Dr Pugh): What I am trying to
get at is that you must be working with some working assumptions
about what would be the cost of re-accommodating staff from 130
offices elsewhere and that has to be factored into the exercise;
I assume it will. ... If you can give us any information on that
it would be very helpful. ... Do you have a figure in your budget
which illustrates the amount you will need to keep all these enquiry
offices open?
At this stage HMRC cannot be precise about the
costs of re-accommodating staff from those offices as it will
depend on a range of factors. These include the amount of Daily
Travel Allowance (DTA) paid to staff that relocate, provision
of IT kit, and other associated accommodation/optimisation costs
at the new location. These costs will be met by the various business
units involved, and they will be including estimates in their
financial bids for next year and following years, as necessary.
HMRC accepts that there will be short-term costs associated with
closing an office and the resulting relocation of work and staff
but these will be outweighed in the long-term by the overall efficiency
savings realised by the restructuring programme as a whole.
Question 80 (Dr Pugh): What I am getting at is
that you are going to have to find new premises to keep these
enquiry offices open in the place they are supposed to be open
and Mr Hartnett said they will be open. That has a cost;
that has a figure. I assume in your planning you know something
and you can give us this.
HMRC has made a number of public commitments
to retain access to its face-to-face advice for customers who
need it. The commitment is to retain access to that advice at
or near the present Enquiry Centre (EC) location. The terms of
the commitment do not constrain us in terms of specific building/location,
service delivery patterns or operating model which will evolve
in response to internal business drivers such as estates consolidation,
and/or external factors such as co-location with other government
departments, or changing patterns of customer demand. Our current
plans to move to alternative service delivery patterns in response
to falling customer demand are fully in line with the commitments
made. The final cost of providing face to face advice in the locations
affected by office closures will depend on how that service is
provided in each location.
On average, it costs HMRC around £48,400
per annum to retain EC. When closing an office except for its
EC, HMRC also incurs a one off cost of between £20,000 and
£90,000, depending on the property to allow its estate supplier
(such as Mapeley) to sub-let the space vacated. For the recently-announced
closures of 130 offices, there are 12 locations where the ECs
are in self-contained parts of the building which reduces these
costs significantly.
However, in line with the move towards shorter
hours and part-week opening for the ECs, HMRC is actively pursuing,
low-cost flexible accommodation solutions such as sharing with
Local Authorities, County Councils, and Post Offices, or with
other government departments like DWP. This solution has already
been achieved in several locations with average costs of around
£12,000 per annum along with one-off set up costs of around
£25,000. This represents a significant cost saving over retaining
a standalone EC presence in all 130 offices or the acquisition
of new full-time premises to provide this service. The accommodation
sharing option is being actively explored for the bulk of ECs
in the offices announced for closure.
Question 81 (Dr Pugh): What I am trying to do
is price the additional costs of this workforce renewal/change/rationalisation
of accommodation. When I enquired about Duke's House, which is
my own constituency as to what would be the effect of closing
down the office, I got from your office a statement which said
that on current figures the payback, accommodation versus other
costs, accommodation rationalisation, would take approximately
19 years. Are you able, for all these 130 offices, to have some
idea of what the payback would be for all of them and
Question 82 (Dr Pugh): It is a document from your
implementation team and it is the business case for the rationalisation.
It does suggest the rather high figure of 19 years before there
is any savings out of this closure
HMRC cannot confirm which specific statement/document
Dr Pugh is referring to, but hopes the following information will
clarify the position.
In a letter dated 9 June 2009 requesting an
internal review of a Freedom of Information Act 2000 request he
made in May 2009, Dr Pugh refers to documents allegedly leaked
from HMRC and passed on by the PCS Union to a local newspaper,
the Southport Visiter, showing that savings from the closure of
Southport tax office would not be generated before a period of
at least 20 years.
In reply, HMRC referred to a document that was
released to Dr Pugh under his FOI request, which set out some
initial and incomplete analysis that was carried out for Duke's
House. It did not represent a true business case. However, the
document did specify that even without taking account of accommodation
savings, the payback period, if salary savings were offset against
possible redundancy costs, would be less than two and a half years.
Similar results might be expected if the same
analysis was carried out for other offices, but it was not. HMRC
is restructuring its office network to bring it in line with plans
to modernise the Department and improve service to customers while
delivering efficiencies for the Exchequer. The Department's transformation
is expected to have long-term benefits in terms of efficiency
savings, tax yield and service delivery.
Question 135 (Mr Bacon): What proportion of public
sector buildings are owned in this way?
RESPONSE FROM
OGC
The government's central E-Pims database captures
the information that the government believes is important to monitoring,
reporting and improving the efficiency and the sustainability
of the civil estate. Information is not systematically captured
on this database about the location of the government's landlords.
The database captures the body to whom rent in paid, whether managing
agent or landlord, but not necessarily the location of the landlord.
13 http://www.ogc.gov.uk/building_the_procurement_profession_in_government.asp Back
14
Gateway Reviews examine programmes and projects at key decision
points in their lifecycle. Back
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