HM Revenue and Customs (HMRC) has issued compulsory redundancy notices to around 150 of its staff across the country – triggering a furious response and the threat of industrial action by the Public and Commercial Services (PCS) union.
HMRC opened talks on the future of around 200 officials – mainly working at administrative level – in August, ahead of confirmation by the tax authority that it plans to radically downsize its estate over the next decade, moving from 170 local offices to 13 regional hubs.
It is understood that around 150 of those staff, working in HMRC enquiry centres and for its local compliance and debt management teams, received confirmation on Tuesday that they are to be made redundant.
HMRC chief Lin Homer looks to "diamond-shaped" future for department
Union warning as HMRC starts talks on fate of 200 staff
Job cuts possible as HMRC to open talks on future of 200 staff
The move prompted PCS to attack the department's handling of the process, although HMRC says it has done "everything possible" to avoid compulsory exits.
PCS general secretary Mark Serwotka said: "It is entirely unnecessary and inflammatory to tell these 150 staff there is no future for them in the civil service when staff are being recruited to do similar work. This is not how reasonable employers behave and we will be considering all options, including industrial action."
"Lengthy and rigorous process"
A document distributed to PCS representatives – and seen by CSW – sheds more light on the union's specific concerns over the job losses.
The union says many HMRC staff "declined an earlier opportunity for voluntary redundancy because they genuinely believed that there would be the prospect of redeployment".
Those staff, PCS argues, may have opted for a more generous voluntary settlement had they known the scale of the planned HMRC office closures.
The union claims that HMRC will not redeploy at-risk staff to any of the offices earmarked for closure over the next few years, instead only considering moves to the larger regional centres – which could mean relocation for many officials.
Asked for a response to the union's claims, a spokesperson for HMRC said: "HMRC does everything possible to avoid compulsory redundancies but the reality is we no longer need the mass processing roles of the past as we move to more skilled and specialist roles.
“We have been through a lengthy and rigorous process to deploy colleagues to other areas of work within HMRC and this work has been on-going since 2014. We have consulted with departmental trade unions to make sure that we've considered all possible redeployment opportunities.”
The department declined the opportunity to confirm the number of staff affected by the process or respond to Serwotka's claim that new employees were being taken on to do "similar work" to those being let go.
HMRC's outgoing chief executive Lin Homer wrote to PCS officials in January, defending the way her organisation had conducted the redundancy process and saying the department had "followed a robust and transparent approach in accordance with the 2008 Cabinet Office Protocol for handling staff surpluses".
She added: “HMRC has communicated clearly throughout the process and when our people at risk were offered voluntary redundancy they were advised that redeployment opportunities will be very limited and compulsory redundancy would be the next step. In addition to this most were offered a voluntary exit and all have been offered voluntary redundancy terms since that time."
"Don't even exist"
The tax authority's headcount has fallen substantially over the past ten years, from 96,000 to an expected 52,000 by April 2016, and Homer has previously told MPs that increased automation will lead to an ongoing reduction in HMRC's administrative roles as the department becomes more "diamond-shaped".
The department says it expects 90% of its current workforce to either work in one of the regional centres "or see out their career in an HMRC office", and plans to keep a series of transitional offices open as it moves to the larger hubs.
But the row between PCS and the tax authority over redundancies highlights the challenge HMRC faces as it seeks to manage further staff reductions alongside a big fall in its number of offices.
One source familiar with the situation, a member of PCS but with reservations about its response to the closure programme, said decisions on redeployment were being made by "different, occasionally conflicting, interests within HMRC".
"The truth is that the new regional centres don't even exist but people are being moved on the assumption that they do," they said.
"The Leeds regional centre isn't even built yet. It's going to have to be a massive building and it simply doesn't exist. Nobody knows where in Leeds it will be, five minutes from the train station or 25 minutes."
While HMRC has recently been at the centre of a political storm over its £130m, ten-year settlement with search giant Google – and MPs have also expressed concern about its customer service performance – a report published by the National Audit Office in 2015 found that the department had increased its tax take while reducing administrative spending by 6%, year-on-year.
November's Spending Review committed HMRC to a further 21% reduction in its baseline resource costs by 2019-20, which the department said would be "delivered through digitisation of tax collection and a smaller but more highly skilled workforce". The department has also said it will reinvest £1.3bn of its savings "to transform HMRC into one of the most digitally advanced tax administrations in the world", with plans to roll out digital tax accounts for citizens and small businesses by next year.