Source · Select Committees · Public Accounts Committee
Recommendation 15
15
HMRC told us it still believed the most cost-effective way of getting good deals in...
Conclusion
HMRC told us it still believed the most cost-effective way of getting good deals in the property market is to enter into long-term leases. The Department explained to us that its regional centres are in “attractive locations” and if it transpired that it needed less space because of the COVID-19 pandemic, it believed that space would be “readily lettable” to other government departments or the private sector.40 HMRC assured us subsequently that, where possible and in keeping with commercial reality, it has negotiated flexibility, such as subletting and sharing of occupation arrangements, into its leases. The Department told us that all of its transactions had been scrutinised and endorsed by qualified Chartered Surveyors, external to government, to demonstrate that, on the terms negotiated, HMRC had achieved value for money over the full term of the leases.41 We asked the Department to agree to take the impact of the pandemic on the commercial property market into account before taking on any more long-term leases and HMRC confirmed that it would.42
Government Response
Acknowledged
HM Government
Acknowledged
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the light of the likely short- and long-term impacts of the COVID-19 pandemic on the department’s requirement for office space and on office rents. 3.3 Before making contractual commitments for its regional centres, the department obtained independent qualified professional advice which confirmed that the flexible lease terms they negotiated offer the best balance of value when building modern offices in locations with a large long-term government presence. It also built in terms enabling the department to sublet space if needed and build in future flexibility. 3.4 While the experience of working during the COVID-19 pandemic is likely to have longer term implications for ways of working, the department expects to continue to be an office-based organisation, requiring high-quality workspaces where people can work together and develop their careers. The department will review what this means in terms of space requirements and work with the Government Property Agency to ensure space freed up by HMRC is made available to other departments who wish to secure long-term space, to support the government’s Places for Growth Programme. The high quality of the department’s regional centre office accommodation, and their prime location in Government Hubs, mean that they are eminently suitable for use by other government departments and there has already been demand from other departments for space in HMRC’s regional centres. 3.5 The lease terms negotiated by the department ensure optimum rental costs in the light of the expected long-term occupation of the offices by HMRC and other government departments.