Croydon regional hub for HMRC set to open this summer

HMRC has confirmed that it will move staff into its first regional hub in Croydon in south London this summer and plans to open the remaining 12 regional centres by 2022, although some staff will be based in six transitional centres until the final relocations are complete by 2026, reports Sara White

The move will see thousands of HMRC staff relocated to a small number of locations from the current 137 local offices and centres across the country. Up to 6,000 redundancies are expected due to the geographic relocations. The tax authority has said that the restructure will save up to £100m on real estate costs.

In a statement HMRC confirmed: ‘We are now very close to being able to announce the locations of a number of our regional centres – and we expect to have announced the majority of them by the end of the summer.

‘The nature of negotiations means that it is difficult to provide an exact date.

‘We have promised our staff that we will tell them first of the location as soon as we are able to, but we plan to provide updates too.’

Last year HMRC announced that the first regional hubs to open would be Croydon and Bristol.

The office restructure has come in for criticism from the Public Accounts Committee (PAC) which has questioned the budget and projected cost savings, stating that HMRC had seriously under-estimated the costs of the restructure.

In September 2016, HMRC revised its relocation costs from the original estimate to reflect a 22% rise in total costs to £3.24bn, and reduced its forecast savings to £212m. In April 2017, HMRC told MPs that it has refined its forecasts and is expecting costs to be £2.8bn, or £150m over the original estimate, while cumulative savings are put at £300m and there is an expectation that the department will save £80m a year thereafter.

HMRC has to go ahead with the current timetable as its multimillion agreement with real estate management company for the property portfolio expires in 2021. This is a 20-year private finance initiative deal, which HMRC set up in 2001 with Mapeley STEPS Contractor Ltd and is valued at around £20bn. As part of the agreement, HMRC sold two thirds of its property estate for £370m to Mapeley on a leaseback basis.

HMRC said: ‘The locations programme is one of the UK’s largest office property programmes. It will bring employees together into 13 modern regional centres, five specialist sites and - until 2027 - six transitional sites.’

The headquarters of HMRC will remain in Whitehall although it is expected that only a skeleton staff will be based in central London.

The government has signed a 20-year lease at the New Waverley development in Edinburgh, which will include the Edinburgh HMRC regional centre. The 190,000 square feet office facility is next to central Waverley Rail Station. It will accommodate up to 12,500 civil servants from a number of departments.

HMRC chief executive, Jon Thompson, said: ‘Locating HMRC’s new regional centre for Edinburgh in the New Waverley development is another step in HMRC’s transformation, into a modern, digitally-advanced tax authority. HMRC will bring its teams together to promote closer working relationships, and increase our effectiveness in collecting taxes.’

The 13 regional centres will be located in:

  • Belfast
  • Birmingham
  • Bristol
  • Cardiff
  • Croydon, south London
  • Edinburgh, New Waverley site
  • Glasgow                                           
  • Leeds
  • Liverpool
  • Manchester
  • Newcastle
  • Nottingham
  • Stratford, east London

Five specialist sites, for work that cannot be done elsewhere, particularly where HMRC needs to work with IT suppliers or other government agencies or departments, will be located in:               

  • Dover
  • Gartcosh (Scottish Crime Campus)
  • Ipswich
  • Telford (Plaza 1 and Plaza 2)
  • Worthing

The six transitional sites will be based in:

  • Canary Wharf (10 Colonnade, E14)
  • East Kilbride (Queensway House)
  • Ipswich (Haven and St Clare Houses)
  • Portsmouth (Lynx House
  • Reading (Sapphire Plaza)
  • Washington (Waterview Park)

The PAC report into HMRC’s Estate is available here

Report by Sara White

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Counting the days until this will all have to be reversed, because real yield falls off a cliff.