Locations Programme: Accounting Officer's Assessment summary
Published 9 May 2024
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Introduction to the Accounting Officer Assessment
It is normal practice for Accounting Officers to scrutinise significant policy proposals or plans of major projects, and then assess whether they measure up to the standards set out in HM Treasury’s Managing Public Money guidance. From April 2017, the government has committed to make a summary of the key points from these assessments available to Parliament. This takes place once the Accounting Officer has agreed an assessment of projects with the Government’s Major Projects Portfolio (GMPP).
Background and context
The Locations programme was launched in 2015 and became part of the GMPP in July 2017. The programme transforms HMRC’s estate to enable the organisation to operate from strategically important locations that support both government’s priorities and HMRC’s delivery. Our people will work in large, modern Regional Centres, Specialist Sites and a London Headquarters from which we can better deliver our services.
Our long-term offices are being sited in locations where HMRC can recruit, retain and develop a talented workforce, equipped with the digital infrastructure and flexible workspace needed to support and motivate our people. In some locations where Transitional Sites were due to close, we will retain a temporary presence to support effective workforce planning and avoid unnecessary redundancy costs.
HMRC has opened 12 Regional Centres in Belfast, Birmingham, Bristol, Cardiff, Croydon, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, Nottingham, and Stratford plus Specialist Sites in Worthing and Ipswich. The programme will continue to deliver solutions (in Newcastle, Portsmouth, East Kilbride, Preston, Dover, Telford, and a further site in Manchester) to meet HMRC’s changing accommodation needs and to ensure HMRC retains required skills in the right locations, minimising the risk of redundancies and the cost of rehire.
Assessment against the Accounting Officer Standards
Regularity
The Locations Programme is a strategic enabling programme for HMRC as well as supporting wider government estates needs. The programme supports the government’s places for growth agenda by creating opportunities and career paths in towns and cities within every region and country of the UK. The programme is enabling HMRC to lead the way in delivering a smaller, better and greener estate.
The Locations Programme is working with other parts of government, and in partnership with Government Property Agency and places for growth programme, to ensure HMRC’s estate is used efficiently and responds to the needs of other government departments (OGDs) for space in the department’s regional centres. By the end of September 2023, HMRC had let over 51,000 square metres of its space to 44 OGDs accommodating over 12,000 full-time equivalent colleagues alongside HMRC people. As well as ensuring that HMRC estate is used efficiently, this supports HMRC to recruit, retain and develop the skills it needs by creating a larger pool of talent and more career opportunities.
Subletting to OGDs is therefore ancillary to HMRC’s function of collection and management of taxes, tax credits and customs, as provided for by section 9 of the Commissioners for Revenue and Customs Act 2005 - Ancillary Powers.
Propriety
The Locations Programme adheres to HMRC’s change lifecycle governance and undertakes appropriate reporting and assessments, including fulfilling the reporting and assurance requirements of the Infrastructure and Projects Authority, as part of the GMPP.
The latest Programme Business Case (PBC) was approved at HMRC’s Change Investment Design Committee in September 2023. Prior versions of the programme business case have been through the same approvals process. Programme Board is the main decision-making authority, and the Senior Responsible Owner is accountable for delivery.
The Locations Programme has been subject to the scrutiny of the Major Projects Review Group, with the first version of the PBC approved by the Chief Secretary to the Treasury in July 2017; this created a formal cost, benefit, and scope operating baseline for the programme. The latest case received HMT approval in January 2024.
The Locations Programme is fully compliant with all relevant Cabinet Office controls.
Value for money
In 2015, HMRC had an ageing network of about 170 offices spread across the UK, ranging in size from ten to 5,700 people, which were expensive to operate. By 31 December 2023, 163 of the (about) 170 offices open at that time had been closed. By the end of 2023 to 2024 HMRC’s Locations Programme will have realised £235 million in savings. It is forecast to deliver a total of £907 million in savings by its completion in 2030 to 2031 and annual savings of £104 million from 2031 onwards.
The commercial functional standard supports achievement of the outcomes sought by the department. It sets expectations and drives consistency in the planning and management of buying goods, works and services, ensuring contracts and relationships with suppliers realise value for money and result in delivery of high-quality public services.
Over the last few years, there have been significant geo-political challenges, labour market challenges and a turbulent economic landscape, which has resulted in persistently high inflation and increased costs in key industries including construction and property. This has led the Locations Programme, HMRC and wider government to reassess and re-evaluate the approach to lease arrangements and project delivery.
The Locations Programme continues to identify options and negotiate with developers to drive the best value for money solutions. The detailed options appraisal for each location will be reflected in project- level business cases as they are developed. The Programme adheres to HM Treasury (HMT) Green Book advice in conducting the appraisal and evaluation of viable solutions within its project business cases. All property deals are taken through Cabinet Office National Property Controls and receive HMT sign-off.
Feasibility
HMRC has delivered 12 regional centres and 2 specialist sites at key locations across the UK in accord with the Locations Programme’s six-year delivery plans covering the period from 2016 to 2022. During that time, about 48,000 HMRC staff have successfully moved into those new buildings with no disruption caused to business operations. Staff have responded to their new working environments with extremely positive feedback and survey results. By December 2023, HMRC had exited some 163 offices, meeting planned lease closure dates and taking full advantage of lease break opportunities.
These successes were achieved against a changing landscape, with the programme overcoming the challenges of EU Transition, COVID-19 and changing government priorities and fiscal events, and the introduction of hybrid office-home working.
The HMRC Locations Programme has received recognition for its achievements, with 12 sites accredited by the Construction Industry Council for their inclusive environments. In 2023, the Programme won the prestigious British Council for Offices (BCO) President’s Award; in addition, 11 offices have either won or been shortlisted for BCO regional awards over the past few years.
The Locations Programme leadership, supported by delivery partners, has the skills and experience needed to achieve the programme deliverables within the required timeframe. Robust programme management and governance are in place to assure plans and progress and the Locations Programme benefits from active support of the Senior Business Sponsor (Director General).
The programme is confident it can deliver its final phase of deliveries to plan, culminating in programme closure.
Conclusion
As the Accounting Officer for HMRC, I have considered my assessment of the Locations Programme and concluded that the proposal is value for money and deliverable. I have approved it as of 12 April 2024. I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifetime of this Programme, I undertake to prepare a revised summary, setting out my updated assessment. This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.
Accounting Officer’s name: Jim Harra, Chief Executive HM Revenue and Customs.
Signature:
Date of signing: 12 April 2024