WELSH REVENUE AUTHORITY Appraisal of Location Options Final
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OFFICIAL SENSITIVE WELSH REVENUE AUTHORITY Appraisal of location options Final Report (version 1.0) Official Sensitive: Location of the WRA Final report. February 2017 (v1.0) Contents Summary 3 Background 4 Context for this decision 4 Approach and engagement 6 Steps taken 7 Operational requirements and critical success factors 9 Other operational requirements 12 Appraisal assumptions 14 Option appraisal 14 Location short list 14 Summary - option appraisal matrix 16 Scoring method 17 Conclusions 18 Annex A – Functional suitability of short listed properties 20 Annex B – Scoring tables: 24 Specialist workforce Proximity to key stakeholders Welsh language skills Annex C – Landfill tax sites & stamp duty transaction tax map 28 2 Official Sensitive: Location of the WRA Final report. February 2017 (v1.0) Summary 1. The Welsh Revenue Authority (WRA) will lead on and be responsible for collecting the Welsh taxes: Land Transaction Tax and Landfill Disposals Tax from April 2018. 2. WRA Implementation Programme (WRAIP) officials have undertaken an options appraisal to help inform the Cabinet Secretary for Finance and Local Government’s decision concerning the office location of the WRA. 3. In considering the operational requirements of this new organisation a large number of business requirements have been identified. Three critical success factors have been determined and used to complete an options appraisal of six shortlisted locations. During appraisal full account has also been taken of the Welsh Government’s location strategy and this is reflected throughout this report. 4. The conclusion of the options appraisal is that south east Wales is the most operationally effective region for the WRA to be based, both for smooth transition on day one and successful delivery in the future. Three Welsh Government offices are potentially available within this area, each of which could potentially meet the WRA’s requirements. Of the three offices, Cathays Park scores the highest in the appraisal in meeting the WRA’s requirements. 5. The appraisal has also identified the need for a presence based away from the main office location, with north Wales being suggested as the best area for this. The approach would help optimise the all-Wales digital service offering to taxpayers and their agents and help at least during the transition between tax systems. 6. The options appraisal makes the following recommendations and key points: i) the WRA should have its main offices located in south east Wales as this area is the most supportive in meeting the WRA’s operational requirements. ii) south east Wales has three Welsh Government offices available which could potentially meet the WRA’s requirements (Cathays Park, Merthyr Tydfil and QED Centre, Treforest). Of these, Merthyr Tydfil has been assessed as being higher risk in its ability to attract key skills and being suitably positioned in relation to its customer base. QED Treforest and Cathays Park have both been assessed as being able to fulfil the WRA requirements well. In the case of QED Treforest, the premises are identified in the Welsh Government’s location strategy for possible disposal in early 2019-20, nevertheless there is scope to provide accommodation at the location beyond this timeframe. Cathays Park might require some relocation of existing Welsh Government staff 3 Official Sensitive: Location of the WRA Final report. February 2017 (v1.0) to accommodate the WRA. It would however provide scope now and in the longer term (as a consequence of on-going office refurbishment) to accommodate the WRA. iii) a mobile WRA role should be established away from the main office location to meet wider customer needs and a WRA presence in north Wales is suggested. 7. The remainder of this document outlines the appraisal process followed and explains the reason behind the recommendations in paragraph 6. Background 8. The Tax Collection and Management (Wales) Act 2016 provides the powers to establish the WRA. 9. The WRA is being set up as a civil service delivery arm of the Welsh Government, wholly funded from the Welsh block grant. Its status is that of a non-Ministerial Government Department and it will be the first such body created by the Welsh Government. It will be operationally independent from Welsh Ministers, acting with impartiality, but it does not need to be geographically separate. It will retain the status of a Government department; not least since tax collection is a government function. Welsh Ministers will set tax policy and will wish to give strategic direction to the WRA, but will not be involved in operational decisions. 10. In July 2016, the Cabinet Secretary for Finance and Local Government announced that the WRA would collect and manage Land Transaction Tax. Furthermore, it would undertake most of the collection and management functions for Landfill Disposals Tax, working with Natural Resources Wales on compliance and enforcement of the tax. 11. A location decision is needed in November 2016 to allow sufficient time for office fit out and to make any structural changes required. It will also be important to have a known office location before the WRA begins recruiting its chair, board and workforce. 12. The WRA will need to be fully operational from April 2018 when the devolved taxes are expected to come into effect. It is anticipated that accommodation will be required at least six months before that date in order for the WRA to prepare for delivery on day one. Context for this decision 13. Establishing the WRA is an historic next step in tax devolution in Wales. The new authority will have a critical role in collecting and managing Welsh devolved taxes efficiently and effectively. The taxes it collects will be a key element of the future funding available for the delivery of essential Welsh public services. 4 Official Sensitive: Location of the WRA Final report. February 2017 (v1.0) 14. The ability of the WRA to operate effectively will be founded on building its credibility. Central to building credibility will be a seamless transition to Welsh taxes for tax-payers. Ensuring the safe delivery of the WRA from day one is the first step in building that necessary credibility. The initial location of the WRA is a key decision in minimising the inherent risk of establishing this new organisation in Wales. 15. At the same time, by creating the WRA the Welsh Government is investing in the medium and long-term administrative capability of government in Wales. Whilst the WRA will not be a large organisation it will need to attract and retain a variety of highly skilled professionals simply in order to carry out its basic functions. Legal, tax compliance, data and digital skills will be essential capabilities for the WRA. 16. It is crucial for the effective and efficient running of the WRA that its chosen location allows for the development of the skilled workforce it will need both now and in the future. The safe launch and future development of the WRA will be significantly supported by choosing a location that meets the immediate and longer-term needs. 17. There is a recognised misapprehension concerning the novel status of WRA. This has led to the idea that the WRA must be geographically separate from Ministers rather than the focus being on ensuring that the WRA is able to take day-to-day tax decisions without the involvement of Ministers and to protect individual taxpayers’ confidential tax information. Approaches elsewhere demonstrate that Government’s and their tax authorities work closely together – Revenue Scotland is located in the Scottish Government’s Victoria Quay office in Edinburgh and similarly HMRC’s head office shares a building with HMT. In the circumstances, it is not necessary for the WRA to be housed in a separate building to the Welsh Government but it will be necessary to make provision so as to protect the confidentiality of individual taxpayers’ information. 5 Official Sensitive: Location of the WRA Final report. February 2017 (v1.0) Approach and Engagement 18. The appraisal has been undertaken in three sequential phases: Phase 1 - clarified that efficiency for the Welsh Government overall was best served by the WRA being located within the Welsh Government estate. This meant that non Welsh Government options were eliminated. Phase 2 - drew up a short-list of viable locations from within the Welsh Government estate. Phase 3 - appraised the short-listed locations based on three agreed critical success factors detailed on pages 9-11. 19. Throughout the appraisal process consideration has been given to the option of one office location as well as a dispersed approach to accommodation. Further detail is provided on pages 12-13 on customer and operational perspectives of these options. 20. Engagement with the Welsh Government’s Administrative Property Strategy (APSG) Group (this officials’ led Group provides a clearing house for all Welsh Government accommodation decisions) and colleagues from the Business and Property Professional Services (BPPS) Division has proved invaluable throughout this process; the advice and information provided has been built into this appraisal. 21. We have ensured a collaborative approach with colleagues across Welsh Government through each phase and also engaged with the relevant WRA project board, the WRA Implementation Programme Board and the Welsh Treasury’s Fiscal Reform Oversight Group. 22. The approach aligns with the Welsh Government’s location strategy’s commitment to consider opportunities for employment across Wales, while seeking a location that best supports future business needs and enhances operational effectiveness. 23. Sustainability has been taken into account throughout the appraisal work. The recommendation has been made with the long-term future of the WRA in mind and those who are likely to be affected by the decision have been involved in the process. The decision to locate on the Welsh Government estate has ensured an integrated approach to the location solution which will allow WRA to contribute towards the Welsh Government's low carbon commitments.