Posted: 15 April 2010
Issue: Online only
Categories: Update, News, Government, Other

Private contract has failed to achieve value, claims report

An influential group of MPs has lambasted HMRC for mishandling a private finance contract to manage the department’s estates.

A new report from the parliamentary Committee of Public Accounts is highly critical of the Revenue for failing to achieve value for money from the first eight years of an arrangement with Mapeley STEPS Contractor Ltd.

The committee’s document is also scathing about the tax avoidance element of the deal between the taxman and Mapeley, saying, ‘The decision… to enter into a commercial arrangement involving tax avoidance through an off-shore company has damaged HMRC's reputation and not delivered any extra benefits to the government’.

In 2001, the Inland Revenue and Customs & Excise, as were, signed a 20-year contract with Mapeley, transferring ownership and management of 60% of their estate, expecting to pay £3.3 billion (2009 prices) over the length of the agreement. To date, HMRC have paid 20% more than anticipated and now expect to pay £3.87 billion over the 20 years.

‘The department has failed to achieve value for money so far as it has not secured all the benefits available over the first eight years and had no plan for obtaining the savings available from the vacation allowances,’ claims the report.

Edward Leigh, chairman of the public accounts committee, added: ‘One of the major benefits that this contract was due to deliver was to enable HMRC to reduce the number of buildings it occupies. Yet it went into the contract without a plan for how it would achieve those savings,’

‘Getting the best out of this contract will require [the Revenue] to work in partnership with Mapeley, as this Committee pointed out in 2005. It is therefore disappointing to see that this still hasn't happened.

‘It will also require HMRC to have the right skills in place to manage the contract. The department must identify the skills gaps it currently has and take action to fill them,’ said Mr Leigh.
 

Share this page

• Add new comment
• Printer-friendly version