Recommendation 14

Another of the government’s major property initiatives is the Government Hubs programme. The government plans to relocate civil servants from hundreds of small offices into dozens of large, modern government hubs that are strategically located in cities across the United Kingdom. HM Revenue and Customs (HMRC) has already opened 12 government hubs. The GPA said that it has already completed four projects and has plans to deliver 17 hubs during this spending review period. It has since written to us with further details on the location and planned opening date for eight of those additional hubs.35 When we questioned the witnesses on the HMRC hubs, no one was able to tell us how many of the 12 hubs were let on 25-year unbreachable leases. The Permanent 27 C&AG’s Report, 1 28 C&AG’s Report, Figure 1 29 Cabinet Office, State of the Estate 2020–21, December 2021 30 Government Property Function, Government Property Strategy: 2022–2030, 9 31 Government Property Function, Government Property Strategy: 2022–2030, 19 32 C&AG’s Report, 1.9 33 Q 33 34 Qq 31, 32 35 Q 26; Letter from Cabinet Office to Committee dated 2 November 2022 12 Managing central government property Secretary of the Cabinet Office has since written to us saying the number is six.36 As a result, six large hubs are now locked into much higher rents than the current market but the capital values for the leases have also declined. HMRC is now desperately trying to sub-let spaces at highly elevated rent. In the past, we have raised concerns about HMRC’s plan to create these regional hubs, particularly about entering into long-term leases and whether the plan represented value for money.37 Moving forward, the Chief Executive of the GPA said he was open to increasing the number of government freeholds so as to secure a ‘balance of tenures’ across their portfolio.38