| Synopsis: |
In 2001 the Inland Revenue and HM Customs & Excise planned to reduce their running costs by transferring ownership or leases of around 60 per cent of its estate (591 properties) to a private contractor, Mapeley. They had the opportunity to save up to GBP 1.2 billion by reducing the size of the estate. However, in 'HM Revenue & Customs' Estate Private Finance Deal Eight Years On (HC 30)' the NAO concludes that the merged HM Revenue & Customs has not achieved value for money on the contract, as it had no long-term plan and has not obtained all available savings. The existence of the contract allowed for a smooth estates merger, following the merger of the two departments in 2005. HMRC has the flexibility to vacate up to 60 per cent of its estate over the 20 year contract, allowing it to save up to GBP 1.2 billion. But it has not recognised the contract as a major strategic asset nor committed appropriate commercial skills to managing it. As a result, the total possible savings available now amount to GBP 900 million. There is now a significant risk that HMRC will not achieve value for money over the rest of the contract unless it strengthens its management of the contract.There needs to be active management at Board level and HMRC needs to develop an estates strategy. |