Recommendation 3

HMRC’s estate strategy risks becoming woefully out of date. Our long-standing concerns about HMRC’s non-breakable long-term property leases have become all the more relevant, and prescient, given the COVID-19 pandemic. In April 2017, long before COVID-19, we raised our concerns about HMRC locking government into holding larger properties for longer than needed. We raised similar concerns again in January and April 2018. Yet HMRC persevered. HMRC’s view is that its regional centres are located in prime sites and it can, therefore, lease them out to the private sector and other government departments if they have spare capacity. We strongly believe this is an out of date assumption that needs urgent revision in light of changing economic conditions. It is commonly accepted that some significant changes in working practices, with more staff working flexibly and less need for traditional office space, are likely to be here to stay. Recommendation: In its Treasury Minute response, we expect HMRC to set out its future plans on how it will review its estate strategy in light of the impact of COVID-19 on the demand for commercial properties, to ensure it can demonstrate value for money from its considerable investment should demand remain suppressed.