HM Revenue and Customs slated over offshore contract

HM REVENUE and Customs has been strongly criticised by MPs over a multibillion-pound private finance deal with an offshore property company to manage part of its office network.

The Commons public accounts committee said HMRC lacked the "commercial skills or business acumen" to manage such a large contract effectively, while its reputation was damaged by its involvement with an offshore firm.

When HMRC signed the 20-year contract with Mapeley Steps in 2001 to take over the ownership and management of 60 per cent of its estate, it expected to pay 3.3 billion at today's prices.

However the committee said it had already paid 312 million more than expected and the final cost was forecast to reach 3.87 billion.

One of the benefits of the deal was supposed to be to enable HMRC to reduce the number of buildings it occupied, however its failure to manage it effectively meant the possible savings had fallen from around 1.2bn to 900m.