HMRC Enquiry Counter Costings

In March 2013 HMRC announced their intention to close public enquiry counters.  They argued that the cost of maintaining the enquiry counters was too high.

They claimed that each appointment costs the department £152. We felt this figure was grossly overinflated. As such PCS Bootle Taxes Branch submitted a Freedom of Information Request. We requested; “The detail of the actual calculation i.e. the precise figures used. [We] would request that this is broken down to individual site costs (the actual name of sites can be redacted to avoid any issues around “commercial in confidence”), however [we] would like the actual figure presented on a site-by-site basis.

In response the department sent us this spreadsheet, which details how they calculated the cost per appointment for each public enquiry counter.

The costs are broken down into 3 broad areas – Staff Costs, Estate Costs and Running Costs. Our initial concerns are that the calculation and conclusion drawn in each of these categories are fundamentally flawed.

These initial findings appear to support our view that the figure of the cost of an enquiry counter appointment has been grossly over inflated and the public, press and politicians have been misled by HMRC.

Our initial concerns focus on the following issues:

Staffing Costs

The department have deducted approximately one third of the Assistant Officer Grade salary costs to account for time spent on work management lists (i.e. non face to face work). We believe that this reasoning is fundamentally flawed. When AO members are working on these lists they are still being supervised and supported by higher grades. Therefore the management time should be similarly factored to account for this work. As such we would argue that total salary costs should be reduced by a third – that they are not presents a misleading figure.

Estate Costs

The range of variance in estate costs casts doubts over the resulting figures. With some Enquiry Counters apparently costing nothing, up to one counter (Peterborough) costing £400,000 per year. Given Peterborough only houses 12 staff this figure does not seem to reflect a reasonable cost for an office of that size. To put this in to context you could rent an entire floor of the Shard Tower in London for less than that price!

We are also concerned that the default cost for sites where a specific estate cost was not available has been estimated at £70,000. We think this is simply not a true reflection of typical costs.

Running Costs

As part of the £152 cost HMRC has factored in around £42 to reflect departmental overheads – in effect this is the Face to Face team’s share of central HMRC costs. However many of these costs will not be reduced as a result of closing the counters. For example they have included a share of the chairman’s and chief executive’s salaries as part of this overhead. It is not likely these salaries will be reduced to reflect the lack of enquiry counters.  A cost has even been included to reflect Face to Face’s share of the HMRC change program… the same program that is wanting to shut enquiry counters!

Due to the fixed nature of these costs they do not provide a true reflection of a cost of an appointment.

Next Steps

To get an accurate assessment of the extent to which the department’s figures have been overstated a great deal of work will be required.

We have provided this information to the GEC for use in their campaigns, and would ask all branches to look at the figures for the enquiry counters in their area to use as part of local campaigns, and also to gather information to discredit these costs.

We would suggest focusing on:

  • total numbers of staff
  • time spent on work not directly connected with face to face appointments
  • actual estate costs (where known)
  • typical rental costs for an office of a similar size in the direct vicinity of the enquiry counters.

Attachments:

Costings Spreadsheet

Summary to Spreadsheet

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One thought on “HMRC Enquiry Counter Costings

  1. Pingback: I read it on the intranet: a reply to HMRC Chief Executive Lin Homer | PCS Bootle Taxes Branch

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