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NAO warns HMRC against ‘uncertainty’ caused by office closures

HM Revenue and Customs (HMRC) staff may have to move long distances in order to keep their jobs as part of its ongoing reorganisation, and will inevitably increase uncertainty among the workforce,  the government spending watchdog has found.

The report by the National Audit Office (NAO) estimates that around 38,000 staff may be forced to relocate as part of HMRC’s long-term plans to replace its 170 UK offices with 13 large regional centres, hoping to save the taxpayer an estimated £83m a year.

The NAO said that the tax authority recognised that its original plans to reduce its estate were unrealistic and that the body is now considering how to clarify them without damaging its long-term strategy, with HMRC already expecting to lose up to 5,000 staff as part of the move.

“The changes HMRC is considering will inevitably increase uncertainty among some of its employees and have the potential to harm its relationship with them unless clear communications are maintained,” the NAO’s report said.

“HMRC’s move to regional centres will require good co-ordination across HMRC to ensure that everyone involved in the moves understands what is expected of them.”

Since HMRC’s spending review settlement in November 2015, the estimated cost of the project has risen by almost £600m, over half of which will be due to higher than expected running costs of its new buildings, the NAO said.

While most workers can expect to move around 18 miles as part of the move to the new regional centres, staff from Cornwall will potentially face the largest move with 174 miles between their current office and the proposed new regional centre in Bristol.

The NAO warned that the moves could see HMRC struggling to retain specialist staff, possibly causing further disruption to its work and adding to the expense of the project.

“Staff that will be recruited at the new regional centres may have lower initial performance, and may take time to reach the productivity levels of more experienced staff,” the report said.

The Public and Commercial Services (PCS) union, which represents many HMRC staff, called for an end to HMRC’s plans last year, warning that it would affect the department’s ability to collect tax.

The NAO’s report made several recommendations for HMRC, saying that it should improve its control of costs of the new regional centres and demonstrate how they will provide a better service to customers.

The watchdog also advised HMRC to analyse the costs and benefits of the centres and make the centres adaptable to future technological and practical changes in order to maximise their lifespan.

A HMRC spokesperson defended the plans, saying: “Our 13 new regional centres are an essential part of our work to modernise HMRC and provide an even better service for our customers, while delivering annual savings to the taxpayer of over £80m from 2025-26.

“It also means modern offices for our staff, with the latest technology, better collaboration between teams, local training and wider career opportunities.”

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