HM Revenue & Customs' plan to drastically scale back its office network will not result in the tax authority's expertise falling off "a cliff edge", HMRC chief executive Dame Lin Homer has said.
HMRC in November announced that it would move from occupying 170 offices to just 13 larger regional centres by 2027, with a series of transitional sites remaining in place over the period to help staff relocate.
Homer – who announced this week that she would be stepping down from the top job at the tax body in March – was on Wednesday questioned on the plans by MPs on the Public Accounts Committee (PAC), with committee chair Meg Hillier raising concerns over a potential "loss of experienced staff".
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"If you're closing offices in some areas and regrouping into regional centres, not every member of staff will be relocated," Hillier said. "Isn't there a concern that if very highly experienced staff are lost to HMRC this will affect the ability to collect taxes?"
Homer said holding on to experienced staff had been "absolutely one of the considerations we took into account" when drawing up the estate proposals, and pointed out that the tax body had already been through "an ongoing couple of decades of estate and location consolidation".
"I think when HMRC was created ten years there were about 530 offices," she said. "So this is not new territory for us."
And she added: "Everyone has a choice to make and one of our challenges is a significant proportion of our workforce are over 50, and indeed, over 55... So we are aware that people may choose not to move. But we believe that over 90% of our workforce are within reasonable daily travel.
"We've proposed arrangements to give reasonable daily travel assistance to those people, and we will undertake one-to-one discussions with all staff so that they can think about that."
The HMRC chief also said the department was "very happy" to consider offering older staff partial retirement in order to ensure that their expertise was retained even as the tax body continued to downsize.
"We have a number of our experienced tax investigators who are increasingly choosing, as they reach beyond 60, indeed some beyond 70... to stay working with us, but possibly only [for] two or three days a week instead of the five days a week that they have [been].
"We're very keen that we don't face a cliff edge because of the demography of our people or the locations. We do think that this is one of the things that will allow us to give the kind of quality of office accommodation, technological support, and training that will make us a strong organisation."
HMRC's estate overhaul is in part prompted by the impending end of a twenty-year deal with private sector firm Mapeley, signed in 2001, to run much of its office network. The deal sees the department make monthly payments to the firm to cover rent, facilities management, maintenance and debt costs.
A 2009 report by the National Audit Office spending watchdog found that the agreement – funded through the private finance intiative (PFI) – had allowed a "smooth merger" of the department's predecessors, the Inland Revenue and HM Customs & Excise. But it warned that HMRC had not achieved value for money on the contract, which was drawn up before the global economic downturn hit property prices.
Explaining the reasons for the latest office closure programme, Homer said HMRC was "approaching the end of of our long-term PFI" and needed to make a decision on renewing many leases by 2019 at the latest.
"We've proposed a consolidation into 13 regional centres – but we are stepping towards that for exactly the reason you've indicated, that we want to ensure that we gave staff as much chance of working with us as possible," she added.
"Big concern"
Homer was also pressed on the tax authority's long-term plans for Scotland. HMRC has promised to set up two new regional centres in Glasgow and Edinburgh in 2019-20, employing up to 6,300 full-time staff between them. But 12 smaller offices across the country are set to close by 2021.
MPs from the Scottish National Party have been increasingly vocal in the House of Commons about the closure plans, and the party's Deidre Brock told Homer there was "big concern" about the reported loss of 2,000 jobs.
And she said it was "rather ironic that before the independence referendum we were told that HMRC jobs would be under threat if Scotland became independent".
Responding, Homer said Scotland would continue to be one of the areas in which HMRC had it "biggest presence" in.
"Although numbers will reduce – and I'm sorry I dopn't have the absolute numbers for every region in my head today – Scotland will still have a bigger proportion of our staff than the relative populations proportions [in the rest of UK].
She added: "We see Scotland as a significant base for HMRC for the long-term future. Our plan there is the same as elsewhere – we do intend to consolidate and concentrate in Glasgow and Edinburgh. It will mean the closure of a number of smaller offices in Inverness but also in Aberdeen and Dundee."
The National Audit Office spending watchdog will report on the value for money implications of HMRC's estate proposals in the autumn. Union PCS has warned that the plans "pose a significant threat to the operation of HMRC, its service to the public and the working lives of staff".