HMRC’s property plans criticised as selection of Leeds comes under the spotlight
MPs have questioned the decision to put HM Revenue and Customs Yorkshire hub in Leeds, rather than the cheaper alternative of Bradford, in a scathing report about the taxman’s savings plans.
HMRC decided 18 months ago that it would consolidate its 170 offices into 13 regional bases in city centres.
More than 4,000 staff will be based at the Leeds hub, which will see 12 of its offices across Yorkshire close by 2021.
However the reorganisation has faced criticism for the level of savings it expects, which has been estimated at a cumulative total of £300m by 2025-26 and then £80m a year.
The report by the Public Accounts Committee, chaired by Labour MP Meg Hillier, concluded HMRC “has yet to demonstrate that it has a realistic and affordable plan to deliver such a radical change to its estate, and we do not believe that it needs to be based in expensive cities across the UK”.
It highlighted the confusion between the major office restructuring and its strategy to transform its services to mainly digital channels.
The 15-strong committee of MPs questioned the choice of locations for the hubs, having grilled senior HMRC staff at hearings.
It said: “[HMRC] has not adequately explained why offices in such expensive locations are necessary to serve customers better or increase the efficiency and effectiveness of its tax compliance work. For example, HMRC has chosen to locate its Yorkshire office in Leeds, despite being more expensive than Bradford, where many HMRC staff already work.”
At a hearing in January, HMRC chief executive Jon Thompson said eight selection criteria were used to choose the locations of the regional hubs, of which cost was one.
He said: “We played in other relevant factors, such as transport infrastructure, whether it could support the digital infrastructure that we need, what it would mean for staff in terms of their career paths, and so on.”
Thompson reviewed the decision to select Leeds ahead of Bradford when he became chief executive, following “significant dialogue” with the chief executive of Bradford City Council, Kersten England.
“This is not just about property costs,” he said. “For example, if you are in York and now we say your job is in Bradford, you would have to go in and out of Leeds. Whereas if you are in Leeds, it is less of a journey.”
