The Public and Commercial Services union (PCS) represent over 80,000 members working in HMRC. We have serious concerns about the STEPS contract and would be grateful if these could be considered at the committee's meeting on 20 January.
By transferring ownership or leases of around 60% of its estate (591 properties) to a private contractor, Mapeley, in 2001, the Inland Revenue and HM Customs & Excise planned to reduce their running costs and had the opportunity to save up to £1.2 billion by reducing the size of the estate. PCS are concerned that the contract does not contain an "escape clause"-an interim period during the life of the contract at which point HMRC could renegotiate or cancel it. It is concerning that, in this instance, it runs for a full 20 years.
When the contract was negotiated, the financial climate was very different to what it is now. We are concerned that no consideration had been given to the possibility of such a significant economic downturn.
The previous financial returns experienced as a result of huge leaps in property values is not now being enjoyed. The returns that were available no longer exist in the same way and consequently will impact on Mapeley's financial stability and possibly their ability to deliver the contract as set out within the terms of the contract.
HMRC are pressing ahead with their Workforce Change programme and on 13 January announced the closure of 130 offices, affecting 3,150 staff. These closures will be costly and will increase the financial and resourcing pressure on the department which is particularly concerning at a time when vast amounts of taxes remain outstanding and the tax gap is estimated to be £100 billion.
The office closures will also have a financial impact on Mapeley. Given that they received financial assistance from the public purse during the first year of the contract and have only recently gained financially stability, the timing of the announcements to close these offices and the impact on Mapeley needs to be seriously considered by HMRC.